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Groupon & Living Social – What Are They and How Do They Work for Businesses?

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As a business owner, are you looking for ways to attract customers to your business?

Most business owners are constantly trying to develop new ways to attract customers to their business, especially new customers who will develop into regular customers, continuing to drive repeat revenue. With all the competition out there, it can be difficult to get people to use your business, especially if they are already using someone else in your market. Why get your hair done at a different place, if you already have a good stylist?

Advertising costs money, and yet spending that money does not guarantee that the advertising will work. Sales and special deal pricing can also bring in new customers, but not if that expensive advertising does not work, which could cost you too much in profit if the sale does not generate enough volume.

That’s where Groupon and Living Social can help. Both of these sites allow merchants to offer a daily deal, a product or service at a greatly discounted rate. Members get a daily email with these deals, ensuring that potential customers see it. If they like the deal then they buy it, creating volume revenue for the merchant. Both services also give deal buyers an individualized link to share with their friends in email or social media.

While these are the similarities, the services work a bit differently. With Groupon, the merchant offers the deal and a minimum number of sales needed for the deal to become valid, so if not enough people buy in, the customers are not charged and the merchant does not have to honor the discount. Living Social does not have this minimum, but when someone buys the deal they get an individualized link to send to their friends. If three people use a deal buyer’s individualized link to buy the deal, the original purchaser gets the product or service for free. In this way users of both services have an incentive to get their friends to shop.

So does it work? According to Living Social 83% of people that purchased a restaurant promotion were first time customers, and 85% of all customers reported being satisfied and planned to return to the business. Customers also spend an average of more than $30 beyond the cost of the voucher (customers have money left over to spend after receiving the deep discount).

Perhaps the best part of all of this, is that a Virtual Assistant from Contemporary VA can help you set up your Groupon or Living Social deals, track them and take care of the details, so that you can concentrate on serving your customers. At Contemporary VA we are experts at helping local businesses take advantage of global resources!

photo credit: swanksalot

Posted on February 27th, 2012 by Russell Bonchu, Virtual Assistant

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