[WHOA!]- Be careful what deals you make on social channels
Posted on July 9, 2010 in Social Media in Wichita Kansas by JuggleMedia
Deals, Groupon, Wichita Social Media
I just got off the phone with an amazing client of mine who was curious about a daily deal program called Groupon. 
She has been approached by the local branch of the company as an opportunity for her to promote her business and sell some of her services. In all, the program is very positive and can generate a lot of one-day buzz for your business.
This blog post is not meant to say that Groupon is bad. I don’t think it is at all. As a matter of fact, I purchased yesterday’s deal of the day. I believe that as a consumer, Groupon is amazing and thus why it is so popular. The point of this blog post is to warn business owners to think about the “deals” they submit and the amount of money it COULD cost them.
Before we get too far, here’s how Groupon works:
Learn How Groupon Works! from The Point on Vimeo.
So lets work through an example. Let’s say that I own Ryan’s Widgets and I have a particularly cool item that I have in overstock and need to get rid of. I know how much it costs, my return on my investment and my margins. I can afford to take a hit if, say my margins are pretty high. So, Groupon would be sweet.
However, let’s just say that I’m a service-based business with a lot of overhead and lower margins- I have to pay staff, parts, time, transportation, ect. Groupon COULD be very beneficial for me if I know what that overhead is and how I can STILL make money on the daily deal.
Now, I’m all about putting yourself out there and taking a hit for one day. No problem. BUT- what happens if you deal is SO GOOD you sell a ton and you then have to work the next 6 months on those deals that happened that one day? Could be painful!
So be careful what you put on Groupon as a business. If you know your margin, consider at least making a little money, but also be careful if the power of social networks takes your deal and blows it out of the water. You want sales, but don’t want to be pro-bono for your own pocket!
Oh and check out today’s deal on Groupon. It’s pretty sweet!
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