Does Groupon Have Brand Loyalty?

by admin on January 18, 2011

As you may know Groupon recently turned down an offer from Google for about $6 Billion.

This had me asking many questions – most importantly -

“Does Groupon have brand loyalty.”  Do Groupons customers and subscribers have loyalty to them?

From one angle I would say that they do.  On the other hand, there is a really great chance that a large portion of their list of customers and subscribers is also subscribed to other deal sites.

The loyalty that Groupon and the others customers and subscribers have is not really brand loyalty to them; it’s simply loyalty to the great deals they bring to the consumer.

 

Businesses and local merchants have much more brand loyalty to Groupon because they understand the power and size of Groupons list and their ability to instantly drive tons of new customers to them.

There have been businesses that actually went in the hole by offering one of their services on Groupon – but this was only result of poor planning by the business owner to not properly price the discount correctly and not set a maximum number of units sold cap on the deal.

The way that the businesses are typically able to see results is because the technology uses collective buying power. This is when a group of people come together and use the rule “there’s power in numbers,” to leverage the group size in exchange for discounts.

If you are a local merchant or product owner and are interested in offering one of your products or services on a daily deal site – you need to figure out the minimum number of new customers that you need in order to offer the deal. Figure out what the value of a new customer is to you. Work out some solid, concrete numbers before committing to this. It’s also important to set a maximum number that are for sale before the deal is sold out.

As the owner of one of these sites – you can charge businesses an up-front fee to promote one of their discounts on your site – OR you can do it for free with a split percentage worked out in advance (or a mixture of both ways).

There are hundreds of thousands of local merchants and product owners that are dying to get more customers and using the Daily Deal Builder technology gives you the ability to offer them the most effective and risk-free advertising imaginable using collective buying power.

Marc Horne
HC Consulting Group

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PPS – Have an opinion about this?  Comment and let us know.

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Tagged as: daily deal builder, daily deal software, deal of the day software, does Groupon have brand loyalty, groupon clone, groupon script, hc consulting group, HCDesk.com, how to start a groupon site, make money online, marc horne

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  • Chris

    Really great post. You have been doing a great job on your blog lately. I definitely agree that Groupon really doesn’t have any brand loyalty. Mainly just people loyal to getting fat deals.

  • http://dailydealbuilder.com groupon clone

    Groupon great consumers trading and sales, great new site you can change the workplace-related social and daily living.More of these websites are going to become bigger as the trend to save money continues.

  • Steven

    Completely agree with you. This market is fresh and ripe for the picking. I kind of feel that Groupon should have sold out when they got the offer. Their market share is just going to get smaller once they hit a threshold when they aren’t growing anymore.

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  • http://www.keithrozario.com/2011/09/starting-your-own-groupon-site.html Keith

    Theres more than one more to build a groupon site, and Groupon is suffering as a result. It turns out it had nothing to breed the brand loyalty it needed before other deal sites started popping out and stealing market share.

    As you’ve pointed out :
    The loyalty that Groupon and the others customers and subscribers have is not really brand loyalty to them; it’s simply loyalty to the great deals they bring to the consumer.

    To me that really hits it on the nail. Absolutely true and sooner or later, we’ll see Groupon representing a concept of deals rather than a website.

    That being said if you’re looking at starting a deal website, just like everything else, the easiest most effective way to start it is usually the most expensive. There are websites that will host your groupon page and charge you a merchant fee of about 2% per transaction, expensive but it allows you to take care of your Groupon Business rather than Groupon site.

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