How to Kick Groupon to the Curb and Become a Local Hero

Everyone’s talking about Groupon these days.

From daily deals to tasteless Super Bowl commercials, this company is getting a lot of attention. And the attention they want most is from the local small businesses that power their revenue model.

Does your local business need Groupon? No, not at all. In fact, there are much better alternatives if you’re up for it.

If you faithfully serve your local community with valuable content, unbeatable offers, and amazing service, you won’t need Groupon.

Here are a few fine ideas on how to do it …

In this episode Brian and I discuss:

  • What Groupon really is, and how that knowledge can revolutionize your business
  • The simple concept that drives buyers (always has/always will)
  • Why you shouldn’t rely on Groupon, Facebook, or Twitter to dominate your market
  • How to create an unstoppable, hyper-local marketing campaign — that you own
  • Why the old ways need to be at the heart of everything you do

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About the Author: Robert Bruce is Copyblogger Media’s Chief Copywriter and Resident Recluse.

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  1. Robert:

    Your show started out about Groupon. If you Google Groupon, there is a Wiki article that comes up. One thing Wiki says is, “In April 2010, the company was valued at $1.35 billion.”

    Then I’m happy you went on to apply ideas they use to small business – like scarcity and value added. Then you covered traffic sources.

    I wondered about the Dallas ad example you made about massage therapists. This seems to be a growing profession. I’ve seen ads for this profession in the Chicago Reader and Craigslist.

    Over the next few months, I’ll see how well I paid attention to stuff I learned in Copyblogger, the former Clayton Makepeace blog, the 30 Day Challenge, etc. Do I get the stuff you guys teach and can I apply it? There’s a new direction I’m taking.

    Keep up the good work- it’s great stuff. May all the readers become as successful as Groupon.

    Randy

  2. Marc Cuban describes the strategy that Brian guesses Groupon used in their ads as an apologevent:

    An Apologevent is where we plan an event that we know we will have to apologize for. The Apologevent will be designed to entice all the “I’m shocked by anything” viewers to call their local stations, their newspapers and of course Inside Edition, The Insider, etc to remind them of how inappropriate the Apologevent was and how shocked they are.

  3. Ha ha, “that pink-haired female.” Nice.

  4. Groupon.. isn’t it a more US localized company/method anyway. Twitter is good for me but FB is a total waste of time.

  5. Surely that’s ‘kerb’?

  6. Personally, I can’t wait to listen to this podcast! I’ve used Groupon once and it has driven A LOT of traffic to my website (during the day of my deal) and helped my just starting out small business get noticed. BUT now they just want to know when the next Groupon deal is and I’m considering using some other sites like Get Social and Urban Dealight to generate interest and bring traffic to my shop. I suppose it depends on who your target audience is and what you sell. I’ll be interested to see if this particular podcast convinces me to stick it out and not do another Groupon. Although, so far, the only people I’ve had in my classes are from Groupon. Go figure.

  7. Without listening to the podcast/MP3 (yet….maybe I’ll regret commenting before…lol), I do think it’s borderline impossible to evade exerting at least some kind of reliance on external websites/tools/services, especially if one hopes to gain a leg up on competition (in whatever niche they are attempting to establish themselves in). To deny the inherent functionality that Facebook affords a business would, IMHO, be very unreasonable…and could actually be very limiting to a person’s endeavor, whether online or offline. I do think some degree of reliance is necessary and unavoidable.

    (off to listen now…hopefully, I didn’t just sound like a fool…lol)

    • I wouldn’t say a fool. :) But no, we don’t say don’t ever use an outside tool — we say don’t rely on that tool to the exclusion of developing your own assets. To use your example, use Facebook, but make sure you’ve also got a site on your own domain and an email list you control, so if Facebook does something hinky you don’t lose your entire marketing plan.

  8. Sorry, I must be missed something, where is that show that is talking about owning your own neighborhood?

  9. Question.. I understand that discounting devalues your product, so when you say, “give your first customers the best deal” does that mean a cheaper price, fast action bonuses? .. The reason I ask is because I’m planning to launch and then increase the price after a week, I just don’t want to devalue my product in the process..

    Great episode by the way..

    • Hector, I don’t think that devalues … *if* you don’t go back and offer the lower price again every time you want some sales. It can definitely mean cheaper price (and/or the fast action bonuses) for the launch, just don’t trot them out 6 times a year or you’re going to train your customers to just wait for a sale.

      • Got it.. thanks Sonia. You’re the best!

      • “…you’re going to train your customers to just wait for a sale”, I’ve heard you all talk about that before Sonia and I just got it!

        I found myself waiting for a merchant to run their “super discount sale” and now I won’t buy anything – because I know the ‘sale’ will eventually come around. I’m officially trained.

        Thank for another great show – Theresa

  10. I am reminded of the saying in the movie, The Incredibles, where one guy turns to another and says, “There’s no school, like the old school.” It does seem like hyper-local IS the wild west and we’re just now seeing the possibilities with texting.

  11. I am sorry to say this but the podcast missed the biggest reason to NOT use Groupon and here it is:
    Groupon requires merchants to give at least 50% off and then takes 50% of what is sold!
    That leaves the merchant with about 25% of the original value of the deal!

    How many businesses can afford to do that without losing money?

    That’s why many of the businesses who do Groupon are service oriented: dance classes, yoga classes, cooking classes, massage therapists, dentists, chiropractors … but also restaurants but they will give $10 off $20 worth of food KNOWING the consumer has to spend more than $20 to eat there!!!

    • Janet, you’re right. We talked about how unprofitable it is, but didn’t give the numbers.

      • By the way Brian, here’s a great opportunity for me to tell you how much I love Copyblogger and how much information and inspiration I derive from it. My favorite post (and I’ll bet it is the favorite of many of your readers): The Cowardly Lion’s Guide to Conquering Your Entrepreneurial Fears. (Archives Jan. 2011). Thanks so much for all the great writing.

    • First of all I am not advocating a daily deal site for all merchants. But the purpose of these sites is to drive one time foot traffic. This is a new customer aquisition strategy and should be filed under a marketing expense.

      I hear this all the time about Gpon and the truth is there are a lot of sites out there that offer the same service and the split is not always 50 percent. But even businesses getting only 25% back as you put it. Is a valuable service that allows merchants to advertise their biz with no upfront costs. I’m not sure why no one ever talks about this.

      Try advertising on TV, Radio, or Print and get the same ROI for your business. I don’t disagree that daily deals aren’t for everyone. But one day one off deals are acutally more powerful than you might think.

      • If people actually come back, yes, this type of deal promotion can be effective. I even pointed out several ways to do that in the show.

        But is it more powerful to have the relationship directly with people you offer deals to than by farming it out to an intermediary like Groupon?

        Yes, it is. And that was the point of the entire discussion.

        • Groupon and the others are a fabulous opportunity for people to get more facebook friends, more hits to their websites, more twitter followers, more emails, more money in their cash registers, more people to even know they exist … but the one thing that is lacking is a LANDING PAGE!!!
          All these advertisers need to have a landing page with an opt in form so that everyone who lands there from a Groupon deal is invited to opt in for more specials and deals directly from the restaurant or whichever business it is!

          Now THAT would ensure that many of the Groupon groupies come back!

          • I have been in direct mail print advertising for 15 years. Basically I sell advertising for a coupon magazine. And things are progressively going downhill on a daily basis. Discounts, no matter how much they are should be given out carefully. If too much is given away it can devastate a business. Groupon is only thinking about their bottom line and have no concern for the advertiser. Yes this will build traffic but how is it going to impact the business. Can their staff handle the extra traffic? Do they have enough product to give away? Are they receiving enough profit form groupon to cover their costs? Of course groupon never talks about these things and some business’ have gone out of business because of it. Bottom line is the discount should work for the business and not the consumer. It has to be attractive to the consumer but it should not in any way hurt the business. It’s just not worth it.

            I would be interested if anyone out there knows exactly how groupon deals are sold. Is it all telemarketing or do they have salespeople out on the streets?
            They say they have over 3,000 salespeople. I would like to know how that works, how they are paid, managed, employees or independant contractors etc… any info would be appreciated.

  12. I have a question a little left of field but it’s really got me stumped. I’ve just started at a home loan company and I’m revamping their website, content and marketing but I’m really having trouble with where to start.

    They have virtually zero traffic right now and now new clients are coming in. My thoughts are similar to the real estate examples in the podcast – providing guides for each buyer type e.g first home buyer etc. My main problem is that my boss keeps telling me “we’re just selling money like everyone else”. I’m really trying to find where they add value with service etc but I’m really struggling ….

    I was also thinking creating a learning center (yes I’m a teaching sells student) which would be available only to our clients with topics about becoming a property investor etc (so we can get the first home buyers in and keep them). The problem is, as lenders they can’t ‘advise’ on anything but lending!

    This is really doing my head in – how do I get around this and how to I get the information out of them?

    They are also thinking of putting an offer on a groupon style site with a low interest rate but I don’t see how this would work as I really don’t think people make big decisions like that with a time restriction … or am I wrong?

  13. “I’m not sure how we ended up having a Valentine’s week at Copyblogger. I think it’s because of that pink-haired female that seems to run the blog nowadays.”

    Haha I love it. It’s been a good week.

    It’s taken me a long time to figure out why I like this podcast so much. I’ve finally figured it out. When you’re writing your copy, you spend tons of time getting it immaculate – which is a great idea, of course. But when you record the podcast, it’s much harder to polish it. I know, you guys sometimes stop and resume to cut the fat, but it’s still quite spontaneous even though you prepare beforehand.

    In other words, lots of cool nuggets “leak out” that make it super awesome to listen to. Kind of like being invited to lunch with Steve Jobs.

    So about Groupon…

    Brian, if I offered you $6 billion for Copyblogger, would you accept?

  14. I’m glad to hear that more and more people agree on discount being the worst marketing effort!

    In order for local businesses to beat Groupon, I think they need some local guidance. Every city should have their own “Go online” initiative, that suits their needs. But that’s easier said than done.

    There should be great possibilities for doing marketing consulting in your local area. I’m sure any local business wants to extend their reach online, but they simply can’t figure out how to do it…

  15. I thought the commercials were hilarious.

  16. Terrific episode! I happened upon this post while searching for something else – got distracted – love Copyblogger…

    So, I live in a smallish Texas town, and I’ve just launched a website (built on Genesis, of course) that incorporates an online business directory, in which businesses can list discounts if they’d like, or just list themselves. The website is intended to be a one-stop-shop for information about local family events, but I’m also trying a discount card program – people can come check out the current discounts on the website, and show their card when at the business to get the current discount. My thought is that this is a place where small – SMALL businesses, like a guy with a lawnmower and a dream – can get the word out about themselves for not a lot of money.

    I realize from listening to the podcast (well, I realized this already) that I didn’t just invent this radical new idea by myself, but I am hoping to implement this in a way that truly does benefit businesses.

    I’m using OIO Publisher to handle the links in the directory, and I think that should allow me OR the business owner to modify the text of the directory listing. I may be wrong about that, as far as letting the business owner modify the listing after the fact – still learning. But to me, that would give the business owner the flexibility if a particular offer isn’t working – or is working TOO well – to modify it before it really gets out of hand, like the example of a horde of Grouponites descending upon a restaurant all on the same day.

    I believe that for a program to be helpful for small, local businesses, it has to be tied to a local publisher who is invested in both the success of the businesses and the needs of the customer base.

    Anyway, if anyone out there in Copyblogger combox land wants to take a look at my site and give me feedback, you can reach the site via clicking on my name.

  17. Hey there – I must say, I am impressed with your website. I had no trouble navigating through all the tabs and the info was very simple to access. I found what I needed in no time at all. Pretty awesome.