June 19, 2019
Groupon for FFL Retailers and Firearms Ranges — Pros and Cons
As a marketing consultant and coach, it’s my job to help my clients bring more revenue into their businesses. One of the key things I focus on is helping clients create the right offers that can increase perceived value to their customers — purchases occur when the customer feels that what they are gaining has more value to them than the money it cost — make more money and stop them from being commoditized.
One method businesses use to achieve these results is to use Groupon. The reason Groupon is successful with businesses is that it helps promote services offered on a company’s website at a discounted rate, attracting potential clients and customers. These often significant discounts create a sense of value for the customer, drawing them into your store as “incremental business,” business you otherwise may have never captured without the tool.
Many would argue that discounting is not the best way to increase value for your business because it lowers the perceived value in place of raising it. It will also not help you make more money long term if used too often. However, under the right circumstances it may be a valuable tool to help you achieve specific goals for your business and reach new customers.
Recently, NSSF asked some of its members what their experiences and thoughts were related to using Groupon for their businesses.
Here are some of the opinions we received from members:
“It’s not as popular as it used to be.”
“It seems like there are a lot of restrictions, but less than some other platforms.”
“Creating retention from the customers you get out of Groupon is difficult, but possible.”
“Discount shoppers are not the customers I want, and 90 percent of them never returned again.”
“Groupon might work better for larger businesses with marketing budgets. If you don’t have the money to spend, it may not be for you.”
“Groupon is best for people looking for something to do, and that helps fill lanes at our range”
“Groupon is great for unique packages and experiences, but don’t discount them too much.”
“I don’t see anything wrong with using Groupon sparingly, just don’t make it a regular thing or people won’t value what you offer.”
“Groupon could be good for date night opportunities. If you are a range that offers something like that, it could be good for you to get some new faces in your business.”
Based on that feedback, Groupon seems to be a mixed bag in terms of a “value-add” tactic. One consistent message, though, is that there can be a time, place, and a reason to use a site like Groupon for growing your business, and it does offer some distinct advantages, including:
- Exposure to Groupon’s network of users, which it claims is 3.4 million people in the U.S.
- No up-front marketing costs. You pay Groupon only when someone buys off its website.
- The ability to market or up-sell to the people who buy and use your Groupon.
- Many have observed that is somewhat less restrictive than other social media platforms.
Three Things Groupon Users Should Consider
The first question you should ask before creating your Groupon deal should be is there enough of a profit margin in the offer that you can always make some money.
A typical model of success for a Groupon listing is to reduce a product or service by up to 50 percent. After this initial discount, you need to also factor in Groupon’s take, which is about 50 percent of the sale plus any credit card fees. As an example, if you normally charge $200 for a class, you might offer it on Groupon for $100, and then you will receive about $48.50-ish for each sale through Groupon. That effectively boils down to a 75-percent discount on your normal class fee, so you’ll need to weigh the possible advantage of new customers who might become regular customers against your bottom line.
If your profit margin on a Groupon offering looks promising, the next thing you should do is to plan an up-sell for those who purchase the offering. This should almost always be a complimentary follow-up offer just for the Groupon customers who responded to your initial offer. It should be one designed to take what they purchased on Groupon to the next level in value, and you should do your best to make this offer difficult to pass up.
At the same time, you don’t want to count on potential profit coming from the up-sell to “right the ship.” You have to first focus on the profitability of the initial Groupon offer without the up-sell. If you do get the up-sell, then it all simply becomes a more profitable transaction, rather than one that breaks even.
A third important consideration is the intent of your Groupon promotion. Is it designed to get folks in for a single purchase or service, or do you want them to come back time and time again?
The best way to get a customer coming back is to stay in front of them. People often forget who you are and what you do because they have more important things happening in their minds. Make sure you get the contact info from your Groupon participants, especially their name, email, and phone number. Feed all your Groupon customers into your marketing campaigns and stay recognizable to them using things like Facebook, email, newsletters and future class list mailings.
If you really want to take your Groupon opportunity to the next level, use a landing page dedicated specifically and only to a particular Groupon offer. People looking at an offer on Groupon often want more information than the Groupon site provides. Give it to them in a way where you add even more perceived value and desire using a video about the offer and outlining the details on the landing page. Not only will that build desire to purchase, the customer will have a better sense of what you, your business and your brand are about, which in turn should make them more confident in completing the Groupon purchase.
Groupon isn’t for everyone, but there are ways to maximize your efforts and realize the most value for your business if it is right for you. Just as with any marketing opportunity, if it’s worth doing, go the extra mile to get the best results possible.
About the Author
Karrie Christen is a veteran marketer with 23 years in the field. After seeing her parents’ business fail and the anguish it brought to her family emotionally and financially, she was driven to create a formula that attracts all the clients a business needs to thrive. That drive became The Client Attraction Formula, which provides inspiration, education and business development strategies to small businesses. Christen has also teamed with FFL Consultants, a collaborative resource for FFLs with a goal of creating more compliant, safe, secure and profitable businesses.