Groupon: Good or Bad for an Eye Care Practice?

Posted by Shawn Salter on Tue, Aug 09, 2011 @ 12:08 PM

Groupon is it good or bad for businessWhen it comes to driving customers to businesses, nothing has been more popular, or trendy, than the social buying site Groupon.

By collaborating with local businesses, Groupon is able to offer consumers deals that take off 50% (at least) of the normal retail price of the product or service being offered. For obvious cost saving reasons, consumers have jumped on the Groupon bandwagon and made the company wildly successful ($750 Million Initial Public Offering). By creating a new market, Groupon quickly found itself surrounded by competitor spin-off companies offering similar services. There's even an Eye Care Industry specific site,, that offers group buying for eye care providers.

Business owners have rejoiced because these extremely deep discount opportunities attract a lot of new customers, which owners are betting on turning into repeat business at a full price. But, is that a good bet to be making? Like all things, it seems to have pros and cons that are worth exploring.

Why It's Good:

1. It Drives Sales - Across all deals and locations in April2011, the average Groupon drove 350 sales and $8,750 in revenue

2. Exposure - With a membership base of 70+ million, Groupon gives your business the opportunity to reach your target market - wherever they might be.

3. New Customers are Guaranteed - Since a minimum number of people must buy for the offer to be valid, Groupon guarantees paying customers. And since the deals, on average, discount 57% of your product, you're bound to have new customers!

Why It's Bad:

1. It Destroys Market Profitability - Once consumers become accustomed to paying 50% less for certain products, it's difficult to get them to pay full-price again. If you and your competitors use Groupon within your industry too much, you could be degrading the overall profitability of your market.

2. It Affects Service and Customer Satisfaction Levels - By selling your product over and over again for only 25% of your normal revenue could eventually eat into your profitability, which can cause companies to hire less expensive people, reduce staff, start offering less product or service for the same price, or start raising prices on their regular customers. All of which will ultimately affect your customers level of satisfaction.

3. It Destroys Customer Loyalty - It's almost impossible to build customer relationships based on pricing. If customers buy your products based on price, they will go wherever the best price is. It's that simple. They use the business while they have a coupon and move on to the next one as soon as they have another coupon. This is why business owners count on Groupon buyers to buy additional service at full price while redeeming their coupon, but studies show that only 13% of buyers add a product at full price.

So what do you think? Have you used Groupon for eyecare practice marketing? Was it good or bad for business? What advice would you give others who are thinking about running a promotion?


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Tags: Marketing and Social Media, Tips & Tools, Events and Promotions

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