

Ask HN: What are the benefits of a small business using Groupon? - poincare

Besides the foot traffic.
======
patio11
1) You get cut a check for a substantial amount of money, potentially weeks or
months in advance of having to provide the good/service which justifies the
money.

2) Exposure to a new audience, who you could ideally:

a) convert into recurring customers

b) upsell into more lucrative services

c) use as social proof / infection vectors for recruiting more customers

3) Did I mention the cash flow thing? Seriously. I think that is _huge_.
Groupon is in the business of calling people on the phone and promising to
give them a lot of money. And _they do it_.

~~~
poincare
I never realized that the small businesses got their checks so early. I always
assumed that Groupon would wait a while (30 days or so) before sending any
money.

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tptacek
It is a form of advertising --- an expense already built into virtually every
small business plan in America --- that (a) pays the business money and (b)
puts the business into direct contact with the target market.

Behold: a link! [http://boss.blogs.nytimes.com/2010/11/23/doing-the-math-
on-a...](http://boss.blogs.nytimes.com/2010/11/23/doing-the-math-on-a-groupon-
deal/)

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solost
It depends on the type of small business and the situation that it is in.
There is a wide range of risk vs. reward opportunities.

For example: If you are a service business, assume you are a massage
therapist. If you are a new business your overhead tends to be the space you
rent from a salon. So discounting your product to get 1st time customers in
and filling potentially empty hours that are only costing you money is a good
thing even at a reduced rate. Add to that knowing that if you do a good job
some of those customers may repeat is a win win for your small business. Not
only do you get business you might not have normally had you gain the true
potential for future business and the opportunity for some word of mouth
marketing as well.

A restaurant on the other hand is a much different situation than the massage
therapist example from above. A restaurant owner has a lot of cost built into
their product. Not only do they have overhead but they have a cost of goods
sold and usually have a limited margin on everything but alcohol. Restaurant
coupons are seemingly always in demand and the daily deals sites are always
looking for more offers from them. Crafting a deal that can insure
profitability is key because more often than not these coupon using customers
don’t come back until they get the next coupon.

If you are an e-commerce small business and you are selling a product you have
to be much more careful. Business with large margins and sales prices in
excess of $100 seem to do best. Businesses with smaller margins almost always
lose money on their sales because they don’t have the margins to be able to
absorb the discount plus their share to the daily deals site.

I work with a few of the largest players in the space so if you need help or
advice let me know.

~~~
poincare
How can I contact you?

~~~
solost
My email adress is in my profile.

------
notahacker
Instant results for minimal effort

You could cultivate similar levels of foot traffic over a longer term for a
lower level of effective spend by setting up your own mailing list, Facebook
group, running targeted local ad campaigns etc. to distribute your own
coupons. But that involves hours of effort. You could pay a third party to run
the campaigns for you (my flatmate makes his living running them) but you're
committing even more money up front, and unless the third party is supplying
or buying a mailing list for you it's still going to take a while for the
results to become obvious.

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chriskjennings
A small business offers a deep discount in hopes of future repeat business at
the regular price.

