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12 Volt : Groupon & Its Imitators

You want a traffic jam up front. But you can get a traffic jam in the bay…

April 2012 By Brett Solomon

Groupon and its competitors can be a double-edged sword. There is no doubt that Groupon can generate sales and traffic. However, we can compare it to your shop's tablesaw. It is a handy and powerful tool, but if you don't know what you are doing you can lose fingers quickly.

Another Groupon analogy that really works is you and your staff making a big pot of soup but only armed to eat it with a fork. You and your staff work really hard eating it but don't really get anywhere. It's a lot of labor without a lot of profit. Undercharging for labor is a surefire way to busywork your staff while reducing morale. On the other hand, Groupon, like a tablesaw or a soup ladle is a specific tool. If you use it tactically, it can help boost your sales and traffic, especially during those slow times.

Groupon Case Studies

Spencer Richardson is the owner of Distinctive Ride in Wasilla, Alaska. Because of Alaska's limited roadlighting, HID headlights are the norm. Richardson has become known as the man to see when it comes to retrofitting lights with a more powerful, and ultimately, safer option.

"Overall I had a good experience with Groupon but I do have a few gripes. With my HID promotion, all went relatively well. We actually sold 318 units and we are a small market to begin with. The pricing was $100 for the Groupon and we received about $58 per unit. Because of our distance, our dealings with Groupon were not with an in-person rep but all over the phone. That led to a little customer confusion on 'dual beam' vs. 'single beam' HID conversions.

"For instance, a 2002 Chevy Silverado takes three single beam kits to do the high, low and fog light. Many customers thought that if they had a Groupon that said 'dual beam' they could get their highs and lows done. We weren't explicit enough with what exactly it came with. Our next Groupon will say '1 HID kit' and not mention dual or single beam."

Richardson also was a little annoyed about having other 12-volt dealers pile on around the same time period. "Groupon hit up some other retailers in our area and we are a small market to begin with. One of their Groupon promotions overlapped our promotion. Luckily it was not for HIDs, but still. It was actually for remote starts for $190 installed including a security bypass." Once you put that low price into customers minds, it is tough for another retailer to undo the 'damage' by trying to sell on quality.


What does Groupon say?We reached out to Groupon directly and spoke with Erin Yeager, the communications coordinator for the company and asked them the questions a 12-volt dealer would want answered. Just like the wording in a Groupon deal, they can be a little vague when pressed, but the Scheduler (as you’ll read below) sounds like a great step in the right direction for us. First, what is the best way for a 12-volt/mobile electronics dealer to get in touch with Groupon?A business’s best bet is to go to http://www.grouponworks.com. There, they can learn anything and everything they need to know about the Groupon process and, on the top right hand corner, they can click on “work with Groupon” to submit an application to be featured (The URL for that page is http://www.grouponworks.com/get-featured). They can do that online or by calling 877-788-785.From there, they’ll be put in touch with a sales rep dedicated to whatever market they are based out of who can help explain the process more thoroughly and ultimately decide on what the feature offering should be. What type of promo does Groupon recommend for a first-time 12-volt retailer to get their feet wet?There is definitely no script or set standard on how to put together a Groupon offering. Every business is different and every market is different. For that reason, the smart move is having a conversation with your rep about what you’re looking to get out of a promotion.Once a promo is complete, what is the typical time and distribution of the payouts from Groupon to the retailer?Every deal is different and the terms of an agreement may vary. Merchants and Groupon sales representatives work very closely when structuring a deal in order to meet the needs of the merchant and the consumer.A lot of the items in our product categories take a couple of hours to install. How does Groupon recommend spacing out customers who want appointments ‘yesterday’ on a popular-selling promo? In other words, can Groupon help the retailer so they are not inundated with customers all at once?Groupon is currently testing out Groupon Scheduler, which is an online scheduling and appointment management tool that’s available to merchants in select cities. Merchants can visit www.Groupon.com/Scheduler for more information and sign up to be notified when the product is available in their area.
 

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