What you Need to Know about Groupon.com

In November 2010 I informed my clients of the huge power of Groupon.com. Groupon had nearly 80% of group buying power online. Today digital coupon comet, Groupon, sends 70 million subscribers deal-of-the-day emails. According to Bloomberg Businessweek, Groupon is a combination of (somewhat now passé) Yellow Pages and Valpak, acting as a kind of price-conscious concierge for millions of customers.


Untapped Potential

Groupon is growing exponentially, possibly the fastest company of all time! Budget is $3-4 billion this year, up from $750 million last year. Rumors of an IPO would value Andrew Mason’s digital couponing biz at $25 billion!

Groupon Now

Two simple buttons have transformed local commerce. Groupon’s “I’m hungry” And “I’m bored” options give single-click access to local merchants looking to fill empty seats, tables, rooms, etc. – now. Instead of being presented with dozens of options – Groupon Now has just two. The program is still in beta, but expected to go live to broader markets in April.

Groupon’s Sense of Humor

Do you remember the $3 million, 30-second ad during the Super Bowl that tried to make a joke of Tibetan repression? “The people of Tibet are in trouble… but they still whip up an amazing fish curry.” The spot bombed. But Groupon has remained an edgy, informative, and entertaining persona. Groupon is known to reward its best customers with silly things like mouth guards, shoe trees, and other non-essentials not coveted by most people. Groupon employs 70 comic writers.

Groupon’s Competition

There is a long list of wannabe daily-deal sites. LivingSocial started building apps for Facebook, but pivoted to daily deals after seeing Groupon takeoff.

The Groupon Now Difference

Daily deals present invites that help the average consumer step outside of their comfort zone. From sky diving to simply trying a different restaurant, you see the deals when you enter your location on your PC or smartphone. Daily deals generate a flood of new customers. A few may become regulars. With Groupon Now you get just a few customers, but at the right time. The real advantage of G Now is eliminating perishable inventory.

If a spa has a canceled massage, but your masseuse is already there - why not give a massage at a discount? If your restaurant is packed every weekend, but you could use a few patrons on a Tuesday for lunch – why not use G Now to draw customers to open tables? G Now is an everyday tool to keep business going.

Rob Solomon, Groupon’s president says, “If we get this right, we are going to influence what tens of millions of people are buying at a frequency that we have never seen before.

The Cons

Groupon takes a 40-50 percent cut on all deals. Small business owners already have a lot on their plate. Managing Groupon Now takes time. And of course – as with discounting too often in any venue – active discounting on Groupon could dissuade customers from ever paying full price. Groupon isn’t the only site around and now Facebook recently announced plans to collect daily deals from Groupon’s rivals.