As of late, group couponing has become all the rage and Groupon has emerged as the premier service. They have a very rapidly expanding, diverse database of highly-activated consumers throughout the country.
It is the last part of that statement that is the most important; they are in touch with activated consumers. We have done work with other services with databases containing similar numbers of people. Without a doubt, Groupon’s consumers are the most activated and the most likely to buy. We have also found that the members of the Groupon database, at least in the Greater Cincinnati Area, are not just 20-somethings in search of a good deal. There are a quite a few “Golden Households” in their database, too.
We (IMPACT) determined this via a batch of group coupons we did for two of our clients. The first was a group coupon we did for Reser Bicycle Outfitters. This Groupon was for a ½ priced tune up and was run in the Spring. This Groupon sold over 450 tune ups. A repeat of that same Groupon in October yielded similar results.
Jason, the store’s owner, was so overwhelmed with repair work that he had to seek additional storage space for the bikes as he worked on them. For him, Groupon proved to be an awesome seeding tool both times. The tune ups yielded significant repair/upgrade work and parts purchase for his shop. In addition, it exposed new customers to the shop and positioned Reser Bicycle Outfitters to capture their sales when they upgrade their existing bikes or look for new ones.
Groupon was and continues to be a hugely successful initiative for Jason Reser.
Another initiative done by IMPACT that gave us insight into the diversity of consumers enrolled in Groupon, was for Totter’s Otterville in Covington, Kentucky. Totter’s Otterville is an incredible place where children learn through play, indoors and out. For their Groupon initiative, Totter’s offered discounted admissions ($8 admissions were sold for $3). We were all shocked when that initiative sold 4,587 Groupons. A little flip-flopping of the data set showed that there were 1,308 unique buyers in that list (there was a limit of 4 per person). 1,308 moms with kids bought this Groupon. Considering that Totter’s target market is NOT the 20-something single individual, we now respect not only the size of Groupon’s database but also the diversity of demographic and psychographic profiles in their database. Oh, and by the way, we have hear unconfirmed reports that Totter’s Groupon was the number 2 performing Groupon in the US… Hats off to us, Totter’s & Groupon. That’s impressive!
Needless to say, John Martin, the owner of Totter’s Otterville was very impressed with this marketing initiative. The Groupon was coupled with some in-store efforts to convert these new consumers to registered users in the Totter’s Otterville database. Many of these new consumers have bought annual passes to Totter’s Otterville and many more have come back, buying full-price admissions time and time again.
Group couponing appears to be an awesome seeding mechanism for businesses. From a marketing standpoint, we caution against using it to drive sales. It does drive sales, but at the significant cost of lost revenue (50% discount to consumers to drive sales of the coupons and the resulting revenue is split between the business and Groupon). It is important that the offer is constructed to be a net-zero for the business and that other initiatives/tools are put in place to convert new customers to future, full-price-paying customers.
If you need help constructing a Groupon or other marketing initiative that works for your business with positive return on investment, please contact us. We’d love to learn a bit about your business and craft new ways for you to build revenues in this difficult economy by making an IMPACT with your target market.
