To Groupon, Or Not to Groupon?

As a small business owner, you want exposure wherever exposure is available. Whether it’s social media, pay-to-play advertisement or even IRL marketing strategies (guerrilla marketing, anyone?), the more visibility you have, the better, right?

But what if that “exposure” means that you peddle your wares at a significant discount, a la “daily deal” coupon sites like Groupon, LivingSocial or any other “buy this now and get it cheap” mediums? Is it worth it?

Mischa Communications has the lowdown.

What Are “Daily Deal” Sites?

For the uninitiated, daily deal sites offer your product or service at a steep discount in return for exposure — and they generally take a share of the revenue you earn.

Pros: No fees to advertise or market on their site.

Cons: You may not know exactly how big a slice of pie you’re serving them until the final bill comes due.

How Deep Do You Want to Dive?

For a struggling small business owner, daily deal sites may seem like a gift from above. Free marketing and publicity? No upfront fees? What’s the harm?

Plenty, as far as your bottom line goes. To even begin to compete with the others in your specific category, you must constantly undercut everyone else.

Imagine you own a small brewery. Your closest competitor is offering 30% off the total tab, which means you’ll need to offer at least 35% off to compete on price. So for every $100 you make, you’ll be losing out on $35 — plus the daily deal site fees. Is it worth it?

Pros: More publicity.

Cons: You have to settle for less than you’re worth to undercut your rivals.

Will It Break Your Business?

Let’s say you jump on the daily deal site bandwagon, knowing full well what the fees will be and how low you need to go to undercut your competition. You’re getting the exposure you need, and everyone is ridiculously excited about your product or service.

What if they’re … too excited?

Can you handle the influx of customers? Will all of your orders and/or service calls be handled in a timely fashion? If you expected to gain more than you lose, but ended up losing more than you gained, can you recover?

Pros: You have absolutely stirred up the crowd, and they’re excited to buy what you have to sell.

Cons: Your staff is running around willy-nilly, attempting to fulfill orders/seat customers/hammer out a service call schedule, and most of them are more than a bit cranky about the added workload.

Are You Settling for the “Easy” Way Out?

Daily deal sites are, effectively, “easy.” There’s not a ton you have to do, aside from post your products or services — and you might get plenty of hits.

But. (Yes, there’s a full-stop “but” here.)

Some customers say daily deal sites actually cheapen your brand. If you’re giving something away at such a discount, is it really worth full price? Deals doexpire after a set period of time. Why should someone pay a premium when you were offering it for next to nothing a week ago?

Pros: Easy.

Cons: Brand loses value overall.

The Bottom Line

While daily deal sites could be the saving grace for a struggling small business, they can drive other small businesses into the ground. Think long and hard before you partner with one of these sites. Be sure you fully understand the fees involved, how many deals the site is authorized to sell on your behalf and any other contract-based minutae.

Don’t sell yourself short. That’s our bottom line.

Mischa Communications has plenty of ways for you to avoid daily deal sites, including a full range of services from marketing to ideation to content development. Simply click here to get started!