Running your own coupon campaign
Behind the group buying mania is the idea retailers can use these services' large mailing lists to promote their business while clearing excess stock to bargain conscious shoppers.
Those reasons are valid, but for the privilege of accessing their databases the group selling services charge substantial merchant commissions, representing a 20 to 50% cut from the seller's income. If the discount is really deep, say 80%, then the site often takes the remainder of the sale, leaving the retailer giving the product away.
For access to a mailing list, that's a pretty big outlay to the merchant who may be operating on thin margins to start with. The cost can even be greater, given most of the group buying subscribers are shopping on price and converting them into loyal customers can be a struggle.
It is possible to run your own coupon campaign. Both Google Places and News Limited's True Local have features in their free local services where you can set up coupon campaigns and publicise offers.
The advantage with these is you capture shoppers in your neighbourhood, the coupon lasts longer than one mail shot and doesn't require a fat discount to grab the attention of shoppers already jaded by 60% off waxing services and half price exercise classes.
Running your own coupon campaign puts you in control, saves the often fat commissions and when done cleverly can break you out of the damaging deep discounting mentality the group buying sites promote.
You can also put links to these offers on your website, Facebook page and other social media channels, further building those channels and giving you more opportunities to convert one-off buyers into loyal customers.
There's also the advantage that the search engines, particularly Google, love these offers – it's part of their US roots where clipping coupons is a fundamental part of retail marketing.
You don't even need to come up with a new offer. If you currently run 'cheap Tuesdays', happy hour or other promotions, you can build a coupon campaign around them.
All of this is another reason why you should be taking the local search tools seriously even if you do already have a website.
Group buying sites do have benefits for a retailer such as exposure to a wider, new audience and it's worth considering them in the right circumstances. Trying a do-it-yourself local coupon campaign may turn out to be the better option for most businesses.
Paul will be holding a master class that looks at local search, adding coupons and how to get a small business fully online in two hours on March 24 in Mosman, NSW. Spaces are still available.