Is Grouponicus for the Rest of Us?

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Groupon is offering businesses in select cities a way to offer Groupon deals rather than, as worded in its FAQ, "stale gift cards", in a program called Grouponicus that's expanding from 15 to 41 cities this year.

Grouponicus allows businesses to offer gift deals crafted for the holidays. A link to Grouponicus deals will be available until Dec. 30 through a button stating "Shop for Holiday Gifts" in the top-right corner of Groupon's website. Offers include Epic Deals--experiences, such as a trip to the taping of a talk show--and Local Gems, which will be of more interest to small and medium-sized businesses.

Small businesses have either embraced or railed against daily deal sites, mainly because offering these kinds of deals can break your bottom line if they aren't put together correctly. While Groupon works with merchants, you can't rely entirely on it to suggest a perfect offering. After all, it makes the most money off of the best deals for consumers, not the best deals for business. So, when would you want to offer a holiday daily deal, and when would you not?

Getting on the Grouponicus Nice List

It isn't made immediately clear how to get on the Grouponicus bus to run a holiday deal. Groupon told me that businesses should sign up to run a regular deal and mention that you’re interested in running a holiday deal. Your account rep will then work with you to structure a Grouponicus deal if you’re in one of the 41 targeted cities, and if what your business is offering matches the Grouponicus model.

Groupon also stressed that the Grouponicus deals should be experiential gifts, and as such should be something like “Dinner for Four with a Prix Fixe Menu” at a fine restaurant, as opposed to the more usual "Dinner for Two for $50" deals found on the site. At the Grouponicus website, you can get a better sense for the kind of holiday deals offered.

If you’re running an online business, you have an equal chance of getting on the roster if you can craft a deal that matches what Groupon is looking for, perhaps even more so since you can offer deals nationwide or across North America for people not living in a Grouponicus city. Even if you can't successfully structure a Grouponicus deal, consumers will still be turning to Groupon to purchase gifts in the holiday season.

Pay Careful Attention to Your Pricing and Brand

Make sure you have your numbers worked out as to what you make on the services or products you’re thinking of offering on Groupon. This way you avoid offering items at a loss that could be very popular. If, for example, you know that the cost of a prix fixe menu at your restaurant is $50 with labor, food costs, and other operational expenses figured in, you know that you can't go below $60 if you want to make something off the deal.

Refigure the numbers if you haven't priced out your products in the past few months. Most of the stories out there about Groupon hate have a lot to do with businesses not structuring deals well, getting slammed with customers, and realizing too late that they were selling at a loss. And watch your branding; if you have a restaurant or salon that prides itself on exclusivity and the need for reservations, Groupon may not be right for you.

Get a Firm Number from Groupon on Revenue Split

Usually you split the proceeds with Groupon. Make sure you’re taking this into account when pricing your service, and run the numbers a few times before solidifying your deal. While there are obvious marketing benefits to Groupon, such as email address acquisition, you won't be doing your business a service if you are selling at a loss; nor can you rely on the bargain shoppers of Groupon to offer you repeat business or large tips.

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Go for It if the Holiday Season Is Your Slow Time

If you run a service such as a car wash, a landscaping company, or a maid service, a holiday daily deal will help you spike your business at a time of year that may traditionally see drop-off due as budget priorities shift to gifts. Grouponicus could be a shot in the arm to a seasonal business like a landscaping company at a traditionally slow time of year. Remember that the deal has to be structured as a holiday gift, and is typically higher-priced than the usual Groupon deal.

Don't Do It if Holiday Time Is Your Big Sales Period for Gifts

You should be moving products and selling services at the best time of year to do so. Offering products that are traditionally given as gifts on a daily deals site could see your business struggling to meet increased demand at cut-rate prices when people may have purchased your items at full retail without the daily deal.

It Fits if Your Business Is Service-Based

A service-based business won't see Grouponicus deals used so much right up until the holidays, as people will be giving the deals away for gifts, for the most part. This means that your business may see a boom January through March when sales are traditionally sluggish, as people are paying off their holiday purchases. There will still be stragglers who use their deals at your busier times of year, but people with gifts such as car detailing and restaurant packages are more likely to use their gifts sooner.

To have a successful holiday deal with Groupon, price your offering correctly and take the revenue split into account. Only do it at a loss if you can afford to write that off, and if you need to spread the word about your business in the community.

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