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Is Groupon Worth It?

Is Groupon Worth It?

Groupon’s daily deals are an enticing way to potentially bring crushing amounts of business to your doorstep, but you really have to be careful at what you do. A few small mistakes can doom your Groupon campaign.

When done badly, daily deals will aggravate you, your customers, and your employees, and even cost you money. That being said, Groupon can be a great way to convert Internet inertia into real life kinetic revenue for your brick-and-mortar business.

These five missteps are common to all daily deals and offers sites, including Facebook offers and PPC landing page coupons. Despite the possible pitfalls, Groupon and daily deals have great potential value for a business: They bring people in the door.

5 Ways to Lose Money on Groupon

Is Groupon Worth It?1. Misunderstand the Users

Groupon users, the potential customers of your business, are categorically young, educated, affluent women. These users are fluent in social media and often first-time customers. Anecdotal data shows that for many, it’s the only time they’ll come in the door.


Groupon Customers are deal-seekers and often try to get the best discount. They may also forget to tip on the non-discounted price. These challenges can create a chain reaction that leads to a poor customer experience potentially inciting Groupon users toward negative reviews, as this Harvard/BU study found. As we all know, bad reviews are kryptonite to any local marketing campaign.

Is Groupon Worth It?2. Underestimate the Cost

Groupon is often condemned for its perceived lack of clarity for the business. A company advertising on Groupon could even be billed for the credit card fees, making a loss-leader an even bigger loser.

Furthermore, Groupon advertisers sometimes forget to cap their deal size, leading to a deluge of potentially non-paying customers who flood a business’s production.

After the deluge, Groupon deals may take a few months to leave circulation. According to the Harvard/BU study, Groupon advertisers may feel effects from the deal up to six months later. This can add to employee fatigue, reduced profit margin, and customer frustration as inventories dwindle.


Is Groupon Worth It?3. Use Poor Technology

Even the technology in your business’s control, like your Groupon landing page, can lead to issues. E-commerce woes can affect a wide variety of businesses, from RSVPing to ticket sales to selling a product in an online store. However, it is important to be able to ensure Groupon and other deals can only go to the buyer once. Too many times, and it is easy to get “two for the price of none” deals from the landing page or e-commerce technology.

As an example, a friend felt like she accidentally hacked the system while attempting to buy a Groupon for a beer brewing kit. It dropped her on a specialized landing page in the online store. She added the item to her cart, then accidentally closed the tab. Thinking that she lost her cart, she went back to the landing page and bought another kit. When she went to check out, both kits were on the cart at the discounted price! Having saved nearly $80 and with two kits, she was happy, but one wonders how the packager felt when he or she put the invoice in the box!

Is Groupon Worth It?4. Limit Traffic Sources

Groupon on its own can drive heavy traffic to your business’s advertising; however, this traffic is often not your usual customer base. These new customers are perfect for expanding your business, but often leave current fans of your business feeling out in the cold.

Many online advertising campaigns ignore multiple traffic sources. If you don’t factor the many ways a Groupon may drive traffic, you will not have a proper accounting of return on your Groupon investment.

Furthermore, social and organic traffic is often highly qualified, compared to the broader audience of Groupon users.

Is Groupon Worth It?5. Lack Goals

The worst mistake a business can make on Groupon is to have no defined goals for the campaign. Like any online campaign, “clicks,” or one-time, Groupon-only customers, are not a viable goal for a campaign.


Repeat customers, continued sales beyond the Groupon, and word-of-mouth are the real wins for a Daily Deals campaign. Users are often not positioned for  conversion in the same way they would be in a traditional online marketing campaign, and thus reinforce negative ideas about Groupon customers.

Doing it Right

Businesses using Groupon are often plagued by mismanagement and mistakes leading to low rates of success, regardless of how many deals are sold. However, a simple plan can undo these common errors before they happen, letting a business thrive and buck the post-Groupon trends.

1. Keep in mind the user base of Groupon: young, female, smart, and wealthy.

  • Does this customer match your marketing personas?

2. Set your goal, then create a system to bring your new customers to the end you want.

  • Consider a one-time event for your Groupon with paid bonus products.
  • Track your groupon customers and remarket to them.

3. Overestimate the cost of the deal to your business.

  • Corollary: Ensure everyone gets paid like it’d be a normal customer.
  • Make sure you limit your deal to a reasonable size.

4 . Ensure your website technology won’t allow someone to abuse your deal.

  • Cut out any opportunity to let deal-hunters get a better deal
  • Breaking your website saves you more effort during your customer’s visit.

5 .Once the Deal is live, control your brand message by optimizing other traffic sources.

  • A page on your website will likely rank well for [{company} groupon]
  • Social media can reach your existing brand advocates easily and effectively

With these five steps, a Groupon deal is less likely to knock you down and will be an asset for your business. Groupon can bring a slew of people to your door; do your best to make them brand advocates and even return customers. Avoid these mistakes, and you’ll find yourself making, not losing money on Groupon.


Have you used Groupon in the past to get your products out there? How did it work out for you?

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Will Scott

Will Scott is CEO of Search Influence, a national online marketing firm focused on small and medium-sized businesses, and white ... [Read full bio]

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