There was a time when online coupons were presumed dead. However, in 2011 they’re cool again, having established themselves as a trusted friend of local retailers and an ally in helping them attract customers online and in store. In 2010, coupons were named one of the five can’t miss mobile marketing trends and their popularity was further enhanced by both social coupon sites like Groupon. If you’re not familiar with Groupon, the site offers city-specific daily deals and last month received a $6 billion marriage proposal from Google. Groupon, however, declined–so Google did what any jilted suitor would do – they found an alternative by creating their own social couponing site. And here we are.
Mashable broke the news last week that the Google was quietly in the process of testing Google Offers, a “new product to help potential customers and clientele find great deals in their area through a daily e-mail,” according to the Offers fact sheet. Mashable was kind enough to put the entire Offers Fact Sheet up on Scribd, so you can take a look at it for yourself.
According to the document, Google Offers will work very similarly to how Groupon and LivingSocial (another social coupon site) work, which, I’m sure, is purely coincidental. The process is this:
- The business owner identifies an item or service they’d like to discount. The offer is presented to the Google Offers team.
- Google Offers’ ad writers write up and develop the offer for you.
- Google’s team identifies the best time publish the offer. Once published, it will then be sent to local subscribers, advertised on Google’s ad network, and promoted on the Google Offers site.
- When a customer bites and accepts the offer, Google will deduct its middleman fees, and you’ll receive 80 percent of your profits within three days of the transaction. You’ll collect the remaining 20 percent of your revenue two months later so that Google can cover any returns or refunds.
- The customer comes into your store and redeems the offer.
Pretty smooth system, right? Exactly, and it’s why Groupon has quickly become a social media darling since its initial launch. And with Google getting in on the action and trying to compete, things may get even sweeter for local retailers.
If you’re a small business owner and you haven’t read up on these social coupon sites, it’s worth your time to do so. Whether it’s Google Offers (which isn’t live yet), Groupon, Social Living or one of the other clones, they present a great marketing opportunity for local businesses.
Why?
First, there’s no risk involved. Because you only owe the middleman a portion of your profit, if no one accepts the offer (and there isn’t a profit), you don’t have to pay. There is no fee for simply creating an offer. Not only does that mean there’s no startup cost involved, it also means that these ad writers are going to be doing their best to craft a great offer for you–because they don’t make money unless you do. Groupon advertises that 97 percent of businesses that experiment with the service come back. And that’s not surprising. You’re putting a specially crafted message in front of a targeted audience. It’s going to convert. That’s Marketing 101.
With Google getting into the game, the scenario becomes even more inviting since SMBs will get to take advantage of Google’s ad network and brand for free. You give Google Offers something to market and they’ll do it for you and present it to local subscribers, their entire ad network, and viewers of the Google Offers site.
It’s another step by Google to dominate the contentious local search market. They may not have had much success with their Google Coupons product, but they’re coming back into a different market with a savvier coupon-using audience. As Greg Sterling notes over at Search Engine Land notes, if Google’s smart, they’ll take a much smaller commission rate than the 50 percent fee that Groupon takes in order to establish market dominance. The trick here will be to get people to try out the new service. Give them an incentive to do so and you’ll get them for the long haul.
Of course, Google Offers is currently in a secret testing mode and isn’t available yet for small business owners to experiment with. However, sites like Groupon already exist. Now may be a good time to get some experience with these types of sites.
Have you experimented with Groupon or any of the social coupon sites? If so, what’s been your experience?
I’m signed up for at least 5 different “clones” in the Salt Lake City area and I don’t see why there can’t be multiple nationwide competitors in the space (Groupon, LivingSocial, Google Offers) because each is inherently limited by the nature of the promotion. You send out 1 deal per day. That’s only 365 deals/year and in major urban areas there are way more businesses than that who would offer a deal.
However, I am a bit annoyed by the fact that I get 5 or 6 new emails every day. I would much rather sign up for one service where I would just get 1 email/day that would have all the deals that applied to me.
My company (usasavingsclub.com) deals with hundreds of local merchants every month. NONE of them will consider a deal at 75% OFF (50% discount – 25% DD payment). We charge 5% with half going to a local school, church or charity.
Additionally, they don’t want the cheepo to show up only once.
Groupon will fade and the bubble will burst.
How many yoga classes, sky diving jumps and spa treatments can one take?
Earl George
Sites like http://www.freefu.com make coupons cool too! Another benefit, businesses don’t have to give up half of the sales revenue either.
Great offers, and businesses keep the sales. A true win-win.
Oh, and offers can be put up in real-time, so current business dynamics can drive a business owner to put up or take down the offer.
Joel
I agree with Robert that there is nothing wrong with having multiple players in the group buying industry. I think we may see different platforms begin to focus more on specific niche markets. There are a handful of niche players now but I think the big players will have a greater level of success by starting broad and getting more focused as they develop. 2011 should be interesting in the group buying trend!
Cheers
For small business a professionally written ad that has no cost unless it is successful is, well, is a dream come true. But are they aware of these advertising options? Many small business owners wear so many hats that social media marketing is left to chance. We need to spread the word and to make sure that small business owners have the training they need to evaluate and use their options.
sudha
Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways.