Groupon.com has become quite a household name.  Just recently Google offered almost 6 billion dollars to buy the company and Groupon rejected the offer, amazing for a company that was started in 2008.

But business owners must decide, Is my business ready to use Groupon.com and as importantly what are the potential challenges with using it as a marketing tool. That question is hard to answer. If you read the Groupon.com site, there are few challenges, just be prepared for an onslaught of new customers, GREAT.

But what is the impact of all those customers and will you make money. That’s the reason for this post. Here are some of the things to consider when thinking about a Groupon promotion.

1. There are no do-overs – get it right the 1st time.

Not only are there no Groupon do-overs, but if you don’t get it right, your new customers can turn on you. Remember, you Groupon customers are tech-savvy. If they aren’t happy with your service or product they may be vocal in a way that’s hard to change. Negative reviews on review sites and blogs could seriously harm your business, so get it right the 1st time.

Groupon.com may seem like a great marketing tool for your business and it may well be but remember there are positives and negatives to every strategy, make sure you are prepared for your Groupon experience.

2. Check Your Margins.

Groupon offers are deeply discounted and Groupon.com charges 1/2 of the sale price on that very aggressively discounted product or service. So understanding your total promotional costs is vital. You may decide that your Groupon promotion is the cost of doing business but be careful on this.  It’s not the only way.

3. Be prepared for the Traffic.

Groupon generates a ton of web traffic and phone calls so your business must be prepared.  Do you have anything in place to analyze web traffic trends?  How will you take advantage of a 1000% increase in traffic.  If you’re like most it will all be wasted.   If you think this the smart phone loving, tech generation will look kindly on an awful website you had better think again.

What will you do if your website goes down? Does your web guy know how to handle downed servers, will your host allow additional traffic and how much will it cost.

How will you handle all of the phone calls? What is the impact on your business? How will you handle your regular customer calls? How will they feel if they can’t get through? How will you handle the additional staffing requirements and phones?  How is your website ready to handle questions?  Detailed information on your website for handling the new customers or potential customers.

4. You may cannibalize current customers.

Your existing customers may be Groupon subscribers and they may buy the offer.  How will that make them feel? Why did they have to wait for Groupon for such a great deal and what will you do if many of the buyers are existing customers?  If you don’t have a loyalty promotion of some kind in place you’re missing a more profitable opportunity and have your priorities in the wrong order.

5. Review and re-review the fine print.

If your offer is “1 per family” make sure you see that is in your final Groupon offer. Groupon will require you to honor any mistakes, so make sure there are none.

6. Be prepared to bankroll the whole thing.

Groupon collects the money. Let me repeat. Groupon collects the money from the sale of the promotion and they don’t send all of it to you at the same time. You will get payments from Groupon 1/3rd at a time. So you must be prepared to bankroll the entire promotion and wait to get your money from Groupon.

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