Why Groupon and LivingSocial Deals Are Great for Businesses

A while back, I got some beef for talking about a great experience I had swimming with manatees thanks to a Groupon deal. The person explained that businesses offer their services for little to no profit and that, since I wouldn’t be a repeat customer, I wasn’t actually doing them any good.

groupon livingsocial

I beg to differ, but we’ll get to that in a second.

I’ve talked to several business owners now who have participated in these deals about whether it was worth it to them or not. It seems that, overall, it was. The reason was typically dependent on the industry they are in.

You can make money…indirectly.

If a business is offering a deal through one of these sites and barely making a profit, that’s on them…not me. It’s simply not good business to be offering one of these deals for little to no profit. A company should first figure out what the minimum amount is that they could charge for a product or service – while still walking away with a profit – and go from there.

No, they’re not going to make millions off of LivingSocial or Groupon, so let’s talk about some reasons why businesses can indirectly make money.

People talk

Sure, people talk more when they’re dissatisfied with a product or service than when they’re satisfied. But if you got a great deal and you’re happy? You are talking, my friend.

I’m not going swimming with manatees again anytime soon because it was a once in a lifetime experience. I did, however, tell everyone I knew that 1) the deal was available, 2) it was an amazing experience, and 3) this company did a spectacular job.

A few of my friends ended up buying the deal (cha-ching!) and a few of my friends and family from afar said they wanted to do it regardless of there being a deal when they came to visit (cha-ching! cha-ching!)

You can get repeat customers

Like I said, I’m not going to go swimming with manatees every year. It was a helluva deal and not a bad drive, but I’m not going to do it again any time soon. Unfortunately, this isn’t the reason the manatee tours company is going to be seeing any big bucks from deals.

However, there have been several deals I’ve bought, done, and become a long time supporter of. Most notably, the gym I go began as a deal. Once I saw how amazing this place was, I just had to keep going.

What’s the takeaway?

Think about it. Are one-in-a-lifetime experience companies like the Manatee Tour really going to get repeat customers anyway? No, of course not. They thrive on new business, which is why online deals work so well for them: they get the word out.

And how about a business like a gym? Sure, people may talk, but what’s really beneficial is the repeat business they end up getting out it.

So should you run a deal for your business every month? Absolutely not. Once in a while? Sure…why not?! The worst that could happen is you get a few new customers 😉

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