Preserve your identity and customers – No group buying at my store!

After the first time I heard about Groupon I thought about the Swedish start-up back in 1999 – Letsbuyit.com… And it was not really a good memory since I tried them and was, how to put it kindly, not very satisfied… Group-buying has never really worked out in the past and now it might or might not… the long-run will tell… all is based on the business model, read the excellent piece in TechCrunch about how the different players could set their model and possibly fare…

But my primary concern is not with the business model per se but how you will kill your brand and earnings… Who can benefit from this business model with group buying while being a local business?

How do you preserve margins and build a loyal circle of repeat-buyers if you are a small shop och service business?

Because that is the key to survival both financially and brand wise…

You put an effort in delivering good customer value based on service, shopping /dining/event/learning/idea experience and delivery. To survive you really really need to focus on your closest customers who will in person or on-line from you. Loyalty Programs, Facebook, Websites and Blogs should be your primary arena paired with some local advertising and of course the most important! Word-of-mouth from your loyal customers… Those persons are the most valuable ones in your world and you should really put an effort to give them the extra value for money you can afford…

Group-buying services will not bring you any of this sad to say… you get the coupon-hunters, the deal eager beavers, the ones that do not care for anything but price… they might not even really be very interested in your offerings… And you will have blown the money on their services that you should have invested in your loyal customers…

So my very short and simple take on this is… unless you have stock that you need to get rid of quickly and do not really care about your margin… Do not go with Groupon or similar services…

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