One Merchant’s Experience With Groupon

Groupon sure is the hot topic these days. And with Google’s “impending” multi-billion dollar purchase of Groupon, the buzz is almost deafening. But is it a good deal for a small merchant to offer a Groupon special?

When I heard one of our ecommerce hosting clients was going to run a Groupon promotion, I was quite interested in how it would turn out. Luckily, Teresa was more than happy to provide feedback and answer a few questions about the whole experience…

Pure Integrity Soy Candles

Pure Integrity Soy Candles is a small ecommerce merchant that we host. They create and sell custom made soy candles. Teresa, one of the owners, was interested in trying something new in terms of marketing, and Groupon seemed like the best way to do this.

Here are a few questions I asked Teresa about their experience with Groupon:

What made your company decide to try Groupon as a marketing tool?

Groupon is an amazing tool to get new customers to your business on a local level.  Even though Groupon was designed to attract local customers to your business; you can use it to attract customers on a national level as well. We were attracted to Groupon to spread the word nationally via our website.

Their website is very user-friendly. I watched all the videos explaining what Groupon is and how it works. Then I watched all the videos on Groupons for business. I loved all the video’s and the business testimonials. After watching these video’s I was sold on this advertising model.  As an entrepreneur, wished I would have thought of this myself!!! :)

As a business, Pure Integrity Candles has done ZERO advertising. We have grown all through word of mouth. We have not spent money on advertising in our retail stores locally, or online. We believe the high price tag with traditional advertising is more suited and effective for products who already have “brand recognition”. It is an effective way to keep your, “already recognized name”, in the forefront of your customers’ mind.

With traditional advertising, it is really hit or miss attracting new people to your business. It is a hope, that people will read your advertisement and then actually make the connection to purchasing the product. We live in a busy world.  I’m sure a lot of people see advertisements/discounts and make a mental note to try the product but, how many actually take the second step to purchase??

With Groupon, this is not a problem.  Groupon was a type of advertising that just made sense for business and customer and seemed to be very different from other advertising options, especially for those who do not have that, “brand recognition”.

Customers like an incentive/discount to try a new product and companies get the opportunity to get their product in front of new customers in the form of a secured sale. What more could you ask for?

Customers see the advertisement/discount, and if they like it, they purchase it on the spot.

The deal/discount is activated when a minimum number of people agree to buy. You decide.

Groupon is a very effective, targeted and measurable form of advertising. What other type of advertising can you actually secure a sale. If there is one and I have missed it, please let me know! With Groupon, your advertising dollars convert into sales on the spot!

We are always looking for ways to gain new customers, in a cost-effective, measurable & targeted way on a national basis. Groupon is a great way to achieve that.

Groupon is a win-win for both Customers & Company.

How did your experience with Groupon fare? How did the promotion turn out?

We had a wonderful experience working with Groupon. The staff is very helpful and motivated to insure your success. When you succeed they succeed. They do take a hefty percentage of the total amount of Groupons sold. But, hey, they deserve it. They have a gigantic list of people they market to and they do all the work.

Setting up your Groupon is a very simple process. You, fill out a short questionnaire, brainstorm ideas along with their expertise, sign a contract and prepare your shopping cart . Groupon has an editorial staff that puts together an introduction to your company and sets up the entire page on their secure website.

Our goal with the promotion was to introduce our candles to new customers on a national basis. But before hitting national markets, we decided to give it a test run in our local market first.  The groupon itself was very successful in terms of how many groupons we sold. We sold just about 400 groupons, which was one of their higher selling groupons for the Buffalo, NY market.

You can set up your deal however you want, based on your company’s criteria. We chose to offer $35.00 worth of candles for $15.00 online only. It was sooooo much fun to watch the Groupons being sold. It was wild to watch the, “live counter” steadily increase on, as more people bought Groupons! The next day was not the same . . . no groupons to watch.

Any tips or words of warning for other ecommerce merchants looking to try Groupon for their store?

Yes, there are a couple of tips I would suggest.

First, make sure your shopping cart can support the deal you set up . . .test and test again. We had some issues, but we were able to overcome them.

Be sure you have extra staff to handle the phone lines. Our phones rang like crazy throughout most of the day. This was great, but will keep your very busy!  As busy as we were, we loved the opportunity to serve our customers and connect with them.

Be sure to explain your Groupon offering on a separate page on your site. Groupon can place a link to a dedicated page on your site in the email Groupon customers get after purchasing the Groupon. We did not do this and had some challenges because of it.  Groupon does state clearly, certain stipulations pertaining to your Groupon, such as 1 per customer, online only, not to be used in conjunction with any other promotion, etc, but people need a reminder. It is easy, for customers to skip over the “rules”.  We all have done it one time or another.

A dedicated “Welcome Groupon Shoppers” page on your site going over the rules and the directions for redeeming it in your shopping cart would be very helpful to customers.

One a side note – when we set up our Groupon we had hoped that most Groupon customers would actually purchase more than the deal. In most cases, they did not. L Either they were skeptical about our product, which is fine or they did not realize or think about buying more candles in conjunction with our shipping specials. We thought with the holidays approaching and the shipping deal, most people would purchase more.

We noticed, that the Groupon customers that we talked to over the phone, substantially ordered more candles. We explained that they may use their Groupon with our shipping special, pointed them to reviews of our candles and got the chance to explain the uniqueness of our candles. People responded well, and average orders were much higher! Here is another good reason, to make that dedicated, “Welcome Groupon Shoppers” page on your website, where you can go over the rules, and highlight the uniqueness of your product.

Would you consider running another Groupon offer in the future?

Yes, we would!!

I highly recommend Groupon. Although it can be a lot of work the first time around as you work out the kinks.

If you are considering Groupon, Feel free to contact me, Teresa, with any questions through our website. I would be more than happy to help you.

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  1. I find it interesting that you had such a fabulous experience with groupon. Perhaps now that they have turned down google’s offer things are different.

    I received a call asking me if I would like to do an offer as a merchant and said yes. It has been at least six weeks, and I have a signed contract and when I called today they said they had no record of me. When I complained to my rep he sent me a youtube video of a restaurant saying how happy they are with groupon.

    I have been blown off twice, never apologized too, told my inquiry was not returned because my rep was in another city, and now they have completely lost my file and apparently I no longer exist. This is ALL after having sent me information, signed a contract, and being told I would have something first by end of August and then by first week in September.

    These people are dunces and should be regarded as nothing short of that.

    • Margo,

      That doesn’t sound like a very pleasant experience. We’ve heard horror stories and great stories like this one from our client. Seems there is no consistency in terms of dealing with Groupon.

      Buyer beware I guess. Thanks for the feedback!

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