Get a table of friends together and it’s likely that most of them have tried Groupon at least once. And if you’re in my circle of friends, it’s a near guarantee that at least one of those friends is addicted to a group-buying website- Groupon or otherwise.  That was definitely the case recently, when a friendly conversation turned into story after story about the lure of huge discounts, and how those discounts seem to so effectively blur the line between a want and a need.  There are a few companies that we hear about a lot – Groupon, Living Social, Capital Dish – as well as so many others who offer strikingly similar good deals and fun bargains, but not so similar levels of service.  It seems everyone has a bad story to recount about the experiences in redeeming something purchased from a group-buying site.

And it’s not just the buyers complaining. The stories on the seller side of the group-buying transaction are often the same.   I talked with the owner of a spa recently who confessed that she doesn’t get repeat business from these sites and from an owner in the food industry who remarked that he doesn’t think these “discount seekers” will become his main customers.

I have to wonder then, why customers – and business owners – feel this way and if it’s possible for both a buyer and a seller to really find group-buying sites worthwhile.  Is this Mission Impossible? Never! But there are some tips that might come in handy, learned from our experiences in working with group-buying sites for our clients here at C.Fox.

Here are five key tips for businesses to improve their group-buying strategy:

(Note: For the sake of this post, I’m using Groupon as the Kleenex of group buying sites – a specific brand which categorizes all similar products/services – so while I may only reference Groupon below, I include all group buying sites in my analysis.)

1)      Throw out the notion of “discount seeker” – the public loves a good bargain but also recognizes good service and products.  A business that thinks 50% off the price means 50% off the usual service is in big trouble.  Word of mouth spreads just as quickly via discount seekers as it does from any other customer segment and perhaps more so.

2)      Truly start a dialogue with your Grouponers and engulf them in your branded world – make sure they know how to sign-up for your newsletter, check out your blog, find you on Facebook, follow you on Twitter, etc. Make sure every interaction you have with them presents these options over and over again.  You’re using a reduced price to start a conversation – make sure you’re giving them the chance to fully engage in that conversation.

3)      Offer “best foot forward” service to each Grouponer. By providing “white glove service” to these customers you will be presenting the best your company has to offer and will increase the opportunity for a repeat customer.

4)      Have your next promotion already planned – don’t let your company fall off the radar once the Groupon deal is over.  Keep customers engaged with ongoing promotions and marketing.  Don’t worry about breaking the budget by continuing to offer deep discounts – a small offer or loyalty perk will do the trick.   My husband found a new golf course through Groupon, and was thrilled with the free tees the course offered for his next round.  It doesn’t take much. You hooked them with Groupon, gave them your best service, now keep your brand top of mind.

5)      Follow up individually – sure, add the Grouponers to your email list for regular customer communication, but first try reaching out with an individual note expressing your thanks and hope they enjoyed your service/product and that you hope to see them again soon.  It’s easy, inexpensive, and unexpected. This is also a great time for a short customer feedback survey.

PR and Marketing strategy is all about facilitating a conversation with your public to build loyalty with existing customers and finding new ones.  Group-buying sites can be a powerful vehicle if businesses make sure their strategy is focused beyond the short term and is geared toward building repeat and loyal customers through great service and communications.

Clearly these sites are doing something right, and worth watching. Groupon has become the fastest growing company in 2010 according to Forbes and Huffington Post.  Just yesterday Mashable announced Groupon is valued at about $15B for an IPO this spring.  As small businesses continue to flock to them, I wonder if companies like Groupon will start to offer coaching or a how-to guide so businesses don’t use their service in a misguided or short-sighted way.   If issues continue on both the business and consumer side, which will stop using Groupon first – the business who don’t see a long-term return on investment or customers who feel Groupons offer a subpar service level?

Have you had a client go through the experience?  Have you incorporated a Groupon strategy into your communications plan?

Tina McCormack Beaty passion is strategic communications, social media, public relations, events, branding, and entrepreneurial marketing. Currently, Tina is a senior director @CFoxComm and a freelancer with focus on Entrepreneurial PR.  She serves as the vice president of Washington Women in Public Relations as well as a guest speaker on PR for Entrepreneurs at her alma mater, Miami University’s Institute for Entrepreneurship.  You can reach Tina at @TMStrategy.

[reus id=”6″][recent posts]