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The Pros and Cons of Groupon

20 Jan, 2011 McKell Naelge

What is Groupon?

Using the principles of collective buying, Groupon negotiates unprecedented discounts with popular businesses. Groupon subscribers get free daily emails alerting them to the deals. The deals are activated only when a minimum number of people agree to buy, encouraging subscribers to share the promotion with family and friends. By guaranteeing a large number of new customers, Groupon has created a powerful new marketing vehicle for local merchants. This innovative approach to e-commerce has brought millions of dollars in new revenue to local businesses while saving more than $1.5 billion for subscribers worldwide.

Pros:
-Gets people in the door, possibility of more purchases
-You get to choose the deal you have
-Increases awareness of your product or service

Cons:
-Only receive about 25% of retail value
-Could buy a Groupon for something you wouldn’t normally buy
-No customer service

Tips:
-Make sure there is a limit to how many Groupons may be purchased, otherwise, you could go out of business
-Make your deal under $99 for maximum benefits

Ogden recently joined Salt Lake City as Utah’s second Groupon market.

For more information about how to get involved with Groupon or other daily deals, contact us at 801.295.9820.

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