'No-Brainer': Groupons Help Attract Customers
Keith McDaniel calls using Groupon a "no-brainer" to attract new customers to Green Gate Olive Oils in Pinehurst.
"It will drive foot traffic all summer," says McDaniel, who co-owns the business with his wife, Georgeanne.
Groupon, which is short for group coupon, is a deal-of-the-day website that features discounted gift certificates usable at local or national companies.
The concept, which has spawned local and national competitors, works as an assurance contract: If a certain number of people sign up for the offer, then the deal becomes available to all. If the predetermined minimum is not met, no one gets the deal that day, which reduces risk for retailers.
"It's a no-brainer for businesses like ours, or any other small business for that matter," Keith McDaniel says. "If you can get first-time customers in here, you're more likely to make them repeat customers."
McDaniel ran a Groupon for his Pinehurst store in March after his assistant manager, Jessica Patella, 28, urged him to do so.
"We ran it in the Fayetteville market area, which includes Moore County, and the Groupon folks ran it as a secondary offer in the Raleigh market," he said. "We got new customers from both markets."
Two weeks later, McDaniel ran a similar offer for the Green Gate store in Winston-Salem managed by his son.
The offer was the same in both markets: Pay $10 up front and get a $20 gift coupon for in-store purchases. Groupon makes money by keeping about half the money the customer pays for the coupon.
McDaniel says 667 coupons were purchased between the two offers. Of that, 205 have been redeemed and $7,836, or an average of $37.79 per coupon-based transaction, has been spent in the stores.
"It's advertising both ways, and we didn't do anything," he says. "Groupon wrote the copy and pulled a picture off our website. They did everything."
Betsy Saye, co-owner of One Eleven Main in downtown Aberdeen, used Groupon for the first time last week, offering a $225 gift certificate for new custom upholstery furniture pieces from Bassett for $75. There were 16 takers, six more than the minimum.
"We're definitely thrilled to get 16 sold because we didn't know how it would go," Saye says. "We also had increased visits to our website and Facebook page, as well as calls into the store inquiring about the promotion and the products. From an exposure standpoint, it was great."
Both Saye and McDaniel says they will use Groupon again.
"We'll probably do it in late summer," McDaniel says. "The current Groupons don't expire until September."
Saye says the only drawback was educating the Groupon staff about product particulars.
"They're going to write the copy how they want," she says. "We tried to make it more clear that the promotion only applied to new furniture, but their copy wasn't to our liking because a potential customer might have inferred that it also applied to reupholstery.
"But there's a happy ending. We sold 16 pieces. It's definitely a win."
The growing trend prompted The Pilot to launch "2 days deal," an online coupon service, earlier this year.
"Groupon was first-to-market nationally, but it was a need locally that we felt we needed to fill," Advertising Director Pat Taylor says. "We really work hard with local merchants on a face-to-face basis, which we feel gives us an advantage. It's hard to beat personalized service."
Taylor adds that The Pilot only pursues business with companies in which an online coupon "fits" their needs.
"You have to find that match because we don't think it works for everybody," he says. "You really have to think things out because if you offer a discount coupon it has to fit your business strategy and ultimately make a profit for you."
Contact Ted M. Natt Jr. at firstname.lastname@example.org.
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