Group coupons: A Help or Hindrance to your Business?

This article was last updated on April 16, 2022

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We have all seen the ads, the unbelievable deals advertised over group coupon buying websites. I was introduced to the phenomenon by a co-worker’s enthusiasm with the site Groupon. I was intrigued by her excitement and decided to sign up in order to see the deals for myself. I now receive daily deal updates from the site, alerting me to a plethora of deals, everything from Spa adventures, culinary experimentations, hair straightening sessions, exotic and not-so-exotic trips, horse-back riding lessons, and painting classes just to name a few.

Why are these online group coupon sites so successful?

Why are sites like Groupon and its similar competitors, Buytopia, Dealfind, GroupDudes, Living Deal, LivingSocial, Teambuy, WagJag, and WebPiggy so popular? What is the impetus behind this impressive success? The daily deal, group buying coupon business has quickly become one of the most lucrative industries on the Internet. The annual sales of Groupon have risen to an estimated $3 billion in just three years, making it the current industry leader. The fact that these sites cater to consumers whilst providing exposure for companies, make them a very attractive third party marketing platform.

How do they work?

• There is a time limit on each daily deal presented; this is usually a day
• The deal only takes effect once enough people have bought it
• Consumers generally get discounts of 50% or greater
• Merchants get a 50-50 split of the profits with the site offering their deal

• Location and brand recognition of your business: Customers are not going to sit in your basement to receive a massage, they want to go to a spa for a fraction of the cost
• Internet exposure: how out there are you? Multiple sites mean more chances for people to purchase your daily deal on deluxe gift basket weaving courses
• Price: the discount you are willing to provide; generally it must be more than 50% to garner serious interest
• The nature of your business: do you provide goods or services?
• Expenses: If you have flexible costs but fixed stock, vs. if you have fixed costs but offer flexible services