How to use Groupon to Increase Brand Awareness

Ask any business owner their thoughts on using Groupon to Increase Brand Awareness and you will get 100 varied, strong opinions. Groupon has single handedly launched businesses and yet many accuse the giant of ruining their business.

First, how does Groupon Merchant work?

First, you agree to become a Groupon Merchant on their network. They then request that you reduce your product or service price by 40-60%. Groupon sends your deal out to the relevant demographic giving you new customers without paying for Brand Awareness. It is important to note that Groupon keeps half of the paid portion of the deal – leaving you about 25% of the total product or service cost.

WAIT – what? You only get half of your discounted price? Exactly. But is it worth it when you have new customers?

Like everything in marketing – it depends. Groupon as an Awareness marketing strategy in not for every business.

The good news – they have made several changes on their Merchant Platform to set you up for a measured success.

For example, there were several small businesses in the beginning who nearly went out of business because they sold too many Groupon’s! There was no limit on the amount of deals that the platform would sell. Now there is. We recently put together a promotion for our client, Texas Green Plumbing. This Groupon for Brand Awareness was able to immediately sell services to those in need of plumbing. We were able to cap the Groupon sells at just 50 deals. Limiting the amount of deal exposure is vital to small businesses that are still in the stage of putting systems into place to operate smoothly.

When Groupon is Bad for Business

So when is Groupon a horrible idea for your business? When you are in no need of brand awareness.

When everyone knows your name, you have a large list, you have existing customers and you are just looking to increase revenues – Groupon is not the way to go. Your existing customers will feel cheated and will likely purchase and use a coupon for what they would have gladly paid the full price.

If you have a luxury brand, Groupon will only cheapen your name. Christian Loubouton shoes will never be on a Groupon deal for a good reason.

Prior to utilizing Groupon as part of your Marketing Strategy, ask yourself these questions first:

  1. Do you need Groupon to Increase Brand Awareness in the immediate future?
  2. Are you ok with existing customers will utilize your Groupon coupon instead of paying full price?
  3. Do you understand that new customers being acquired have their first loyalty to Groupon – not your business?
  4. Do you have a full Marketing Strategy to cultivate new customers?

If you need Groupon to Increase Brand Awareness with initial exposure, then the platform is a viable option. If you’re expecting a massive boost in revenue – this is not it! Consider Groupon as an alternative to an Adwords campaign.

You must have a Followup Marketing Strategy!

Consider this real world example to me personally: my husband purchased a Groupon for me to get my haircut in a new city seeing that I was sad to lose “My Guy.” The hair technician treated me like less of a customer. She rushed through the cut and color, forgot my bangs, and when I pointed them out prior to paying? She botched them on one side horrifically.

Flip side, I found my Dallas hair stylist, you know “My Guy” through a Groupon. Celso from Matthew Tully was fabulous. But he was pleasant, treated me exceptionally well and I was happy to come back to pay full price.

New acquired customers must go through the Excite phase and you must architect the “Ah Ha” that keeps them coming back. You must have a Marketing Strategy. You must have a completed Customer Journey Canvas, even basic, to cultivate these human interactions that will not only create repeat customers, but that will turn these clients into active promoters and advocates of your service.

Maybe these new clients don’t have enough money to purchase your services on a regular basis…but they are on social media where they can actively promote you to those that can pay you.

Or they can write you a horrific review.

Tak care of your new clients.

Use Groupon to Increase Brand Awareness, get people in the door and then offer your own specials. Focus heavy on the Excite and Ascend stage to upsell them and get them to come back to you.

Once you have the awareness in the marketplace that you need, once you have a customer list – stop using Groupon!

Don’t rely completely on your Groupon deal. You might find that a well optimized Adwords campaign achieves better results in the long run.

Remember that there are several ways to grow immediate brand awareness and most of them require a LOT of money – think AdWords, Facebook Ads, and professional viral videos. Groupon requires zero up front cost and your leads have already hit the Conversion Stage.

Groupon is a Brand Awareness tool – not an instantaneous revenue multiplier. It is vital that you have a complete Marketing Strategy to cultivate new customer acquisition to ensure repeat customers and clients.

Groupon to Increase Brand Awareness: Yes or No? What is it about their service that you’ve or hate? Let us know in the comments below!

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Jena Apgar, Chief Digital Marketing Warfare Strategist