How to succeed with selling on Groupon [+ Pros and Cons]

Most people remember Groupon as a company that was booming around 2008. The idea that you no longer had to pay full price for anything anymore was definitely tempting for a lot of consumers. Now, Groupon is no longer valued as 1.35 Billion US Dollars (yup – they had that valuation back in the good old times..).

By looking at this graph, you can clearly see that things have gone a bit downhill over the last years:

However, Groupon is still an excellent platform to drive customers to your business. Many people will claim that “Groupon is dead”, which is a quite normal statement to make when an e-commerce company has reduced its value with 500 % over the last five years.

But saying that Groupon is dead is simply wrong. This is the proof:

According to SimilarWeb, Groupon.com does still have about 60 million page views per month. Needless to say, this is highly relevant traffic with an excellent conversion rate.

Quick fun fac for yout: the average conversion rate for a deal landing page on Groupon is between 2% and 5%. If your deal falls below 2 % CVR, it will be deemed a failure.

Getting new customers through Groupon is still possible, but you really need to know how you can design a deal to maximize the positive outcome. I will help you with that.

Who am I and why am I in a position to educate you about Groupon marketing?

I have been working with Partnerships in an eyewear company for about two years. Throughout that time period, I have:

– Been in charge of 46 e-commerce deals on Groupon.
– One single deal for a retail store.
– Worked with Groupon, Let`s Deal and Daily Deal in 12 different countries.
– Gained more than 10,000 new customers through a period of 16 months.

In other words: I know a thing or two about using “daily deal websites” as a marketing platform.

What should you think of before contacting Groupon?

Please answer these questions before contacting Groupon.

1. Do you have the best offer on the market?

This is extremely important for Groupon. If your own website, your E-mail list or any Groupon competitors display a better offer than what you can offer them, there is no need to contact them. Every time I have negotiated with a Groupon account manager, they always ask me: “Are you sure that this is the best offer on the market right now?”.

Frankly, the big Groupon offices (the UK, Australia, and the USA) will very often also need you to have a better offer than your competitors. If your competitor is giving 70 % off the newest collection, you would need to give a 75 % discount to be listed.

2. Can you come up with a deal structure?

Never get in touch with Groupon and say the following: “I have a business with a great product range and I wonder if I can make a deal with you guys?”. Not only will they hate you, but they will eat you alive.

This is how you should formulate your first inquiry to Groupon: “I run an e-commerce business where we got 500 pieces of overstock on some branded t-shirts [Gucci, Prada, Ralph Lauren]. Would you be able to offer them for 20 USD on Groupon.com where you would keep 5 USD and send 15 USD back to me for every purchase?”.

ALWAYS come up with a proper deal structure. And please do your research – there are already tons of deals out there where you can copy their structure. No need to re-invent the wheel.

3. Are you ready to break-even or take a loss in exchange for new customers?

You might understand that making a huge profit on Groupon is quite difficult. Unless you sell weapons or drugs, which by the way are both illegal to sell on the open market, you probably don’t have high margins after:

– Providing the best offer on the market and
– the fact that Groupon very often gets a commission of 25 % of every purchase.

In other words: you need to do your calculations. You will often see that you will struggle to make a profit on the first sale. You have to hope that these customers will come back through other channels (organically, through EDM, word-of-mouth, etc.) to make sure that they provide some value at all to your business.

Pros and cons of selling on Groupon

Make sure that you have thought it all through before you contact your local Groupon office.

Pros

– You get a bunch of new customers.

– It can be cheap (depending on the deal).

– You get your business out to a market segment that you wouldn’t find unless you used Groupon advertising.

– Groupon can still deliver volumes. In the first deal we did in Australia, we gained more than 250 new customers within a month. For most business owners, that really makes a positive impact.

Cons

– Groupon customers can be very discount-driven. In other words: you might struggle to get them as loyal customers.

– If you have a strong focus on brand identity, appearing on a Daily Deal website might not fit a luxurious or trendy brand.

Active and in-active Groupon offices around the world

Most countries still have an active Groupon website. However, many of them have been shut down and/or replaced with similar “daily deal” sites. This is an overview I made of such websites globally:

Groupon:

Australia, New Zealand, UK, France, Netherlands, Belgium, Germany, USA, Poland, Spain, Canada.

Let`s Deal:

Sweden, Norway, Finland.

DailyDeal:

Germany, Austria.

Deal.dk, Sweetdeal.dk & Bownty.dk:

Denmark.

Questions?

Do you have any questions about Groupon marketing or want to share some of your own experiences as a business owner? Feel free to add a comment below and I will make sure to answer.