To Groupon or not

Or any other social couponing sites.

Groupon sells your $100 gift certificate on-line for $50. Out of the $50 dollar sale, your business and Groupon split the $50 less any service charges, ie credit card charges you pay for. At 2.5% credit card charge and you take away another $1.25 and you have now netted $23.75.

$23.75 for offering a $100 gift certificate.

The theory is that you are getting new customers to try your product and hopefully convert them to repeat customers. But then you are starting a relationship with new customers who may always expect discounts.

Or are you falling in the same marketing plan that cellular and cable companies offer? Where new customers get special pricing at the expense of the loyal customers who have paid the freight along the way.

Why not take $25 and reward your loyal customers.

Tony Mariani

2 answers you will need in determining your advertising and marketing budget

What is your cost to acquire a new customer?

What is the lifetime value of a customer?

When you can answer these two questions, it will help you find the balance in your advertising and marketing strategy of rewarding loyalty and repeat business and chasing transactional business.

Tony Mariani