To Groupon or Not

You may have heard of a little company called Groupon. Well, they came up with a coupon idea that took the U.S. by storm. In a nutshell, they “pre-sell” product, by way of a coupon, for small businesses in order to drive traffic, increase the customer base and create an all-around buzz. Consumers love Groupon and their quirky little ads. They love the deals that can be had even more. In fact, there are many copy cat sites out there offering the same thing.

Well, if its so great, why did we suggest that you think twice about using Groupon for your window cleaning company in our last post? Let’s do the math. Groupon requires you to offer at least 50% off to get consumers excited and, THEN, they split the sales of those with you 50/50. So….

Say you can clean the windows at an average house (out only) for $100. Groupon asks you to clean that same house for $50 in order to earn more loyal customers. In actuality, because you split the sales, you are now cleaning or sending a crew out to clean windows for just $25. Shocked? Well, I can tell you, after running a window cleaning business myself for 18 years, that it would stink!

Problem 1: If you are a one-man operation, you couldn’t keep up with demand and would have egg on your face.

Problem 2: If you run crews, you are sending them all over town to clean windows and need to split that $25 with every guy (or gal) on the crew and Uncle Sam. Not possible. Unless, of course, if your crew volunteers to work for $2 an hour.

Problem 3: Groupon is sold as a one-time deal. Your hopes, as a small business owner, are that the people who buy the special offer will like you so much that they become loyal customers. Maybe. Maybe not. In fact, other small business owners have reported that it is NOT the case. People are NOT returning.

Still curious? Google “Groupon bad” and read any of the pages of results that pop up. There are a million and one ways to get new customers; try one of those first.

If you HAVE used Groupon effectively, we’d love to hear your thoughts.

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