Why Social Marketing Beats Groupon
For a small business, discount platforms like Groupon can offer lots of marketing exposure and jump-start a new business. But pitfalls abound: potential customers might think your business is a low-value operation, returning customers may continue to want a discounted price, and then there’s the steep fees (50 percent of sales made on the site) that Groupon extracts on the backend.
A social media campaign provides as much exposure as Groupon but builds in more stability.
A targeted ad campaign using Google Adwords, Facebook, and Yelp requires money upfront but it builds more stable relationships with customers over time. On Groupon, consumers have a different mindset: they’re scanning the deals wondering what they can take advantage of. They’re not thinking about making a local business a part of their lifestyle.
Then there’s problems with the buyer experience. Even Groupon CEO Rich Williams acknowledges that buyers and merchants can experience “friction” when redeeming coupons and consumers complain that coupons expire too early. A bad shopping experience means businesses don’t build long-term relationships with consumers.
Give customers a nudge.
With targeted ads, businesses can find the customers they want via zip code, age, or income-level. By keeping your ads and postings fresh, customers will see you and keep you in mind. Your ad acts like a reminder: potential customers are nudged into buying when they see that the service or product they need requires a simple click on the screen.