The Groupon Challenge

Last week when I was at the AFCP conference, a number of people asked me to share my thoughts on Groupon. They were nervous about this new competitor and what it means to our industry. At this point I don't see Groupon as much of a threat. By design, Groupon only makes one offer per day in any area. Their strength lies in keeping things simple, they know if they bombard people with offers consumers will tune out. Their "pay only for response" model is very interesting. They can do this because they control the entire process which gives them an accurate accounting of the response to their ads. To ensure a good response Groupon requires their customers to offer at least 50% off. I registered with Groupon to see what local businesses are using their service. Thus far, I have seen only a few of our advertisers on Groupon. They attract mostly upscale non traditional advertisers. I believe we can learn several things from Groupon:

• The power of simplicity. Keep your advertising simple with one offer to create impact.


• The power of a good offer. Groupon gets great results because they offer consumers significant savings


• Think out of the box, Groupon proves that many "Non-advertisers" will promote themselves if you can offer them something unique.

Keep Smiling, Keep Selling!

Thanks

Jim Busch