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Using Group Buying Sites to Promote Your Business

A flurry of group buying sites have hit the internet: Groupon, Living Social, Gilt City, Bloomspot, Lifebooker, Travelzoo Local Deals…and those are just the national ones! Can they help your business — or are they just a headache?

How Group Buying Sites Work

Group buying sites work by offering a discount to a large group of customers. For example, a restaurant might offer $50 worth of food for just $25. To make the offer cost-effective for businesses, the deal only becomes valid if enough people purchase it. The sites offer a good flexibility; you can talk with a customer service representative about what kind of deal structure fits with your business.

Some sites also let you offer multiple deals — a choice between lunch and dinner, for example, or deals for multiple people (a boat ride for two, a boat ride for four, etc.). Because the deals are only available for a few days at most, customers are motivated to buy immediately instead of wait.

Pros and Cons

Using sites like Groupon to promote your business work best for attracting new customers. Many discount seekers will try things they would never normally try because they’re getting a good deal, and don’t have to shell out a large amount of money. Ideally, these customers will become regular customers, and will tell friends about their positive experiences. All of the sites feature testimonials from a variety of business owners about how the deals helped them grow their businesses. “The exposure you get from being featured on Groupon is huge because Groupon is huge,” said one salon owner.

However, using a group buying sites has its cons. Because so many sites exist — and offer new deals every day — some customers will simply look for the best deal instead of become a regular customer of the same place. Why return to a restaurant and pay the full amount of a meal or service when you can try a brand new place at a discounted price?

Also, you must be prepared for the immediate increase in volume that will come as a result of your online deal. Some customers have complained that businesses were not prepared to accommodate them when they tried to redeem their deals. Make sure all of your employees understand the fine print of the deal, and don’t forget to put a system in place for tracking and redemption.


Dave Donovan


Dave Donovan has written extensively for the web with a primary focus on articles targeting finance and business.