Join Date: Sep 2006
Location: Louisville, KY
Location: Louisville, KY
Sportbike: 08 Suzuki GSXR600, 06 GSXR1000
Years Riding: Sponsored by Suzuki for 6 years.
How you found us: Fred from Sportbikes.net
I'll address Groupon from the business standpoint. I looked at them for Car TLC for oil changes.
Let's use a $40 deal for example. It gets discounted to $20 for the Groupon...Groupon takes half of that and you get $10. But not so fast...there is also another 2.5% fee for them processing the credit cards which knocks your take home down to $7.50 for a $40 regular sale. What sucks is you get 1/3 payment 7 days after the Groupon...the next 1/3..... 60 days later and the final 1/3...90 days later. If people cash them in sooner they will pay faster.
Restaurants and salons use Groupon a lot...it kills there business because you get the groupon chasers and they won't spend anymore money, tie up regular paying customers and trash you in reviews. I had friends in Phoenix that used it in their restaurant and hated it...only 25% return customers and trashed them in reviews online because they caught them trying to use coupons twice, etc.
I, on the other hand believe it would be great for me. I'll use them in the spring for Car TLC. We have a different business though....a new concept of servicing vehicles that people aren't familiar with and once people use our service they LOVE IT and stick with us as customers. I also get the upsells...your car needs stuff....I get the upsells of tire rotations, wiper blades, air/cabin filters etc. Our main goal is get new customers as fast as possible because they stick with us. Your vehicle has to be serviced...you don't have to buy extra food when at a restaurant.
I just did a Try It Local...an offshoot of Groupon. I sold 90 coupons and limited it to 2 per person.....exactly 2/3 of the people bought 1 and 1/3 bought 2 coupons. What's nice with TIL...is you get to keep 68% of the funds paid out 100% a week later and it's run through each Chamber of Commerce in the cities they are in.
In 2 weeks since running the special I've serviced 25 people out of 64 new customers. 50% of them I've had upsells in service and I've also added 5 new customers on top of that from their friends or co-workers. So far it's been a great investment. Everyone in the Try it Local office bought a coupon and I've serviced 1/2 of them so far....they love our concept and actually handle Try it Local nationwide from down here. Out of the 64 customers that purchased...only 1 was a current customer of ours.
I didn't want to do a Groupon because at most I could only handle 400 coupons by myself. 10-15% are cashed in the first 2 weeks and then 10-15% the last 2 weeks before expiration...it drops for the weeks in between.
I'll do a Groupon in the spring when we have other employees and can handle 1,200+ Groupon coupons. I just need the new customers....but you don't want to run a Groupon twice a year because you will just get your current customers buying them...not effective. Big O Tires did a Groupon and sold 2,600 coupons, which is what they set the maximum number at...wow.
To give you an idea....Louisville has 1.2million people...300,000 get groupon....Try it Local has 35,000.
I think it really comes down to your type of business....if you just want to get your name out there, are new and not in the restaurant or salon business and are doing something unique like us...I think it's great. The goal is to try and break even on the cost of the service.....then it's a great way to reach a lot of people with no out of pocket expense other than your time in labor.