Groupon’s valuation recently eclipsed $1 billion as part of a new investment round. Yes, that’s billion with a “B.” Profitable and 270 employees strong, Groupon is now the dominant player in the social-buying sector.
I asked Groupon’s founder and CEO, Andrew Mason, some questions about the startup and how businesses can best take advantage of social-buying services. For another opportunity to chat with Andrew, join us on May 13 as part of the Social Media Success Summit. The event is fully online, so there are no travel expenses.
What does the rise of your company (and glut of competitors) say about the demand for daily couponing?
I think Groupon resonates with people because it’s an excellent way to discover new local experiences. The deal is the nudge we need to actually do something instead of just reading about it.
And how has social media played a part in that growth?
We think of Groupon as a commerce layer that sits on the social graph created by sites like Twitter and Facebook. Our site is all about social experiences — restaurants, concerts, etc. — and people use social media to find other people to share those experiences with.
What is the No. 1 tip you’d give to business owners looking to give their offer legs?
People don’t like restrictions — for example, we never feature “gotcha” deals like: “$25 value for $10, but requires a minimum $50 purchase.” Our research shows that customers will spend on average above that $50 anyway, so lose the condition and avoid leaving a sour taste in the customer’s mouth.
How can business owners effectively spread their offer using social-media tools?
Some merchants set up a specific tab on their Facebook page or website addressing the specifics of their Groupon deal, making it easy for buyers to make a reservation or set appointments to come in and redeem. We also encourage businesses to retweet the deal links we post on our Twitter stream and become fans of our Facebook pages to attract new customers.
Image credit, gvictoria, via iStockphoto
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I like that way of looking at it. That it's not a coupon site, but a social media tool that shows people a great local business and at the same time gives them a coupon to actually go there and not just read about it. That's very clever. I think that's a biggest difference why Groupon has exploded while the hundreds of coupons sites out there are all flat with growth.
My recent post Better Not be in it for the Money
Have you ever considered just giving a good product and good service at a decent price? Makes more sense than devalueing your brand and product or couponing your self out of existance.