Groupon is a website that provides deals of the day. It caters to the needs of the customers and provides the information about the deals and ongoing discounts on various goods and services. Currently, the deals cater the needs of approximately 150 major cities of North America and over 100 other cities worldwide. Groupon is a combination of two words Group and Coupon and that largely explains the business model of Groupon. The business model of Groupon is that the deal would become valid only if a number of other people purchase the discount deal with you. There has been a paradigm shift in the model of Groupon. Now, the focus of Groupon is on 55,000+ newly released coupons by the website. These coupons have been brought to you by about 8000 retailers. In the traditional method the website provided discounted coupons at a minimum charge however now these newly released coupons provided by Groupon are absolutely free of cost. There are several merchants associated with Groupons such as Home Depot, Walgreens, Sears, Sports Authority, and Nordstrom.
Why Groupon over traditional advertising?
When the business houses opt for traditional advertising they are bound to pay for all the costs. However, the results are not guaranteed in the traditional method. In most cases the results may come in a span of few weeks, months, quarter or even a year. However, in case of Groupon the deals will be listed on the homepage of the website of Groupon, the Twitter page of Groupon and will also be sent via emails to all the registered users of Groupon. So, whoever finds the deal impressive can instantly vouch for it and avail the offer. Moreover, there is also an application of Groupon that is compatible for Android, iPad and iPhone users. Thus the reach is wide and the results are spontaneous. There are several small and medium scale business houses that have experienced a vast growth by registering on the Groupon. Example, in case you have a newly opened business you can offer a $10 product at $5 if purchased with Groupon coupon. Thus, you can get your customer for once in your store and there you can offer excellent services so that customers come again and again.
In Groupon the registered user base is composed of approximately 70% young people and the educated woman of the country. This is the reason that most of the discount coupons offered by Groupon are of beauty, health or fitness services. However, there are also deals for restaurants and other gateways.
How Groupon works?
Several business houses come up to Groupon with ideas to provide discounted services. Only in case that Groupon affirms to list the product or service offered by the company they’ll take care of all the copy-writing and legal formalities related to the product or service offered. The business houses are required to pay a subscription only when there are enough people availing that deal. Besides this, Groupon even gets 50% from the total purchase of the deal.
A large number of business houses have claimed that they have been able to achieve break even after redeeming all the Groupon coupons and the exposure is bound to earn them approximately 20% in the long run. In addition there is no advertising expense besides the fee they pay.