This past week I was watching Dragons’ Den on CBC. A team of young Toronto entrepreneurs were making a pitch about their Group Savings website that leverages social media to drive the deal – Team Buy.
I recognized that this idea isn’t new it is just a local version of Groupon which came to Toronto in April 2010.
“Groupon is a deal-of-the-day website that is localized to major markets in the United States and Canada. The first market for Groupon was Chicago, followed soon thereafter by Boston and New York City and Toronto.” [source: wikipedia]
A new “Groupon” is offered in each market per day. If a certain number of people sign up for the offer, then the deal is on… if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by getting a cut of the deal from the retailer. Groupon generates social media buzz for the company offering the deal. Users who buy a deal of the day are encouraged to use social media tools such as Twitter and Facebook to promote the Groupon deal with their friends to help ensure the minimum is met and the deal will go ahead.
Groupon and competitors like Team Buy also have affiliate programs where bloggers and web site owners can post the deal-of-the-day on their site and share in the resulting revenue. Using Groupon or Team Buy is a great way to drive traffic to your website and promote your business. It is a new way to spend marketing dollars.
Ted of Toronto Kayak & Canoe Adventures has used Groupon to promote his business:
“Groupon has been a perfect match for my company: Toronto Kayak & Canoe Adventures Unlike other marketing methods, with Groupon you get what you pay for. Groupon takes a cut on the event fee. But you only pay for what they sell. We have completed our second Groupon campaign. Our summer Intro to Kayaking sold over 1200 prepaid spots. Our latest October, Fall Colours – Intro to Kayaking & Canoeing just sold 1000 spots. We have had great success with our Groupon Campaigns. Customers save 50% we get full tours. Both are winners.”
What do you think of Groupon? I would love to hear about your Groupon experiences, please leave a comment.
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I don’t have any experience with Groupon yet (but I am looking forward to it). The marketing concept seems like a win-win for consumers and retailers. At first I thought that only large retailers would benefit but Toronto Kayak’s experience plus the experience of the Indie coffee shops has proven otherwise.
I’ve used both Team Buy http://www.teambuy.ca/ and Living Social http://livingsocial.com/
Both sites offer excellent value and have unique offers to choose from. I found the sites easy to use. I haven’t redeemed my deals yet but friends have and reported that they had a good experience!
Thanks JB – I’ll checkout Living Social as well. There are a number of these sites popping up. It is nice to hear from a users experience as well.
Collective buying is becoming famous on the internet nowadays. Trusted sites such as GroupOn,LivingSocial, and TeamBuy are being listed in a startup website which lists various deal sites in one space GroupbuyUnited.com.
Thanks Joan. I was just realizing that with so many of these services it would be hard for people to follow them all. This is a great link for consumers.
I’ve used Groupon a few times, it’s great. I just signed up for Livingsocial.com… let’s check it out. nnJosenhttp://www.webdesignersdirectory.ca
I’ve used Groupon a few times, it’s great. I just signed up for Livingsocial.com… let’s check it out.
Jose
http://www.webdesignersdirectory.ca