Living Social or Groupon?

[bg.graf]

Anyone considered trying to do a groupon/living social special to expand your client base in your area? I mean, doing like cleanings/tune-ups or something for half-price doesn't put you in the red on those types of jobs, and then you could hopefully keep them and have satisfied customers..


OR... do you think that it would be a bad experience because LS and Groupon buyers are cheapwads that would be lousy and harrassing customers... Thoughts?

 

[cmonova]

You might want to check the area you live in and see if they will even allow a computer business to advertise. Both of those companies have said no in the past depending on where you live.

 

[Paul Rodgers]

From what I have heard Groupon is a way to get the customers you don't want (cheap/non-returning customers).

 

[RichmondTech]

I have heard more positive comments about Living Social, and was looking at running a promotion with them myself. Keep in mind that you must offer a high margin product or service to make the deal work. For example, if you have a product or service that normally costs $100, to offer it on Groupon or LS they really want you to take at least 50% off. So that turns your $100 product or service into a $50 sale, but Groupon or LS will take 50% of what comes in, so you end up getting $25 for each $100 product or service you sell.

 

[bg.graf]

I have heard more positive comments about Living Social, and was looking at running a promotion with them myself. Keep in mind that you must offer a high margin product or service to make the deal work. For example, if you have a product or service that normally costs $100, to offer it on Groupon or LS they really want you to take at least 50% off. So that turns your $100 product or service into a $50 sale, but Groupon or LS will take 50% of what comes in, so you end up getting $25 for each $100 product or service you sell.

Right, I've looked into that, but if your doing tune-ups or ANYTHING that is high-margin, you won't be "losing money" (don't get all technical with opportunity cost though) the purpose would be to gain a big customer base and their contact info.

 

[RichmondTech]

Right, I've looked into that, but if your doing tune-ups or ANYTHING that is high-margin, you won't be "losing money" (don't get all technical with opportunity cost though) the purpose would be to gain a big customer base and their contact info.

Another tech that I spoke with that recently ran a LS deal got less than a dozen buyers, so as much as we all want the flood gates to open up with sales galore, it's nice to have reasonable expectations for computer repair shops. They ran 50% off a virus removal and gave a few months to make use of the deal. Great for those with immediate problems, but good to purchase now in case something happens during the offer period. From a technician's standpoint that might want to be a good promotion to offer because while you're taking a hit on the virus removal, there are other upsell opportunities to help get back some margin.

 

[Appleby]

OR... do you think that it would be a bad experience because LS and Groupon buyers are cheapwads that would be lousy and harrassing customers... Thoughts?

That's my take. Speaking from experience all the things we bought off of Groupon or Living Social were either discounts to businesses we already do business with (like our dentist office or local fast food Mexican restaurant) or places we used the coupon and never returned. Not saying that is true for everyone, but I don't want to mess with it. I'd much rather try to find a way to get good returning business customers who are willing to pay for good service.

Just my 2 cents.