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

Social coupon sites

The three popular sites are Groupon, LivingSocial and SocialBuy.

Before you jump in with both feet, do the math. Look at your margins and see if the deep discounts are worth it.

If you are a new business, do you want to start building your brand as a discounter?

If business is hurting you might be tempted to discount but its likely a short term fix for whats ailing.

There are pros and cons to coupons.

Know why it should be part your marketing mix and not because its the flavor of the day.

Tony Mariani