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

Lessons from Groupon

Over the weekend I listened to an interview with Andrew Mason, the founder of Groupon. He had some very nasty things to say about print advertising. We are squarely in Groupon's sights and he is coming after our business. He is very proud of the results his "model" is producing for small local businesses. He credits their proactive method of sending offers to customers for generating large responses. Later in the interview he talked about the importance of his people. His people are trained to convince advertisers to offer deep discounts to Groupon members. I believe these highly motivating offers are the key to Groupon's success and that if businesses made the same offer in print that the response would be even greater. The take away here is that we need to push clients to make compelling offers in their ads.

Keep Smiling, Keep Selling!

Thanks Jim Busch