Is Groupon worth it?
August 15, 2011 By Dave Koehler

For those of you who don't know, Groupon is a Website that offers coupons to a group of people that can be used at local businesses (Group coupon. Clever, right?). When a minimum number of people agree to the specific daily offer, everyone in the group gets a certificate for the discount. There are a number of competitor sites that have sprung up including Living Social, but Groupon is still king of this category.

Groupon makes makes money by taking half of the cost for themselves. If you are selling a product or service for $40, and the Groupon is for 50% off, the consumer pays $20. Groupon gets $10, and the business gets $10, and hopefully a lot of new customers.

And there are the issues. First of all, that's quite a big discount when the business is only getting ¼ of the regular price. In addition, it may not be new customers that redeem the Groupon, and even if they do, there is no guarantee that any of those people will become regular customers.

Clearly, it is up to the business to make sure the customers are getting something worth coming back for. However, there have been a lot of complaints that many businesses are taking a big loss, and not seeing much, if any, increase in business.

So, is Groupon right for you? I'd say no for most businesses, and maybe for some. This site offers some good ideas to consider before you jump in. You might also just offer a discount for everyone that “likes” your page on Facebook, or follows you on Twitter. It's a simple way to reward your loyal followers and attract new ones. And of course, what marketing plan would be complete without and ad on Princeton Online. ;-)

If you have used, or are considering using Groupon, I'd love to hear about it in the comments.