Frog Blog

Why Groupon May Not Be Right For Your Business

Strategic Marketing 1 of 3: Concept Positioning

Groupon, an online coupon service has become a web phenomenon. Friends from time to time may encourage coupon usage by posting a link to a Groupon on social networking sites. An online coupon can be positive for a new brand attempting to drive traffic and build a customer base. Conversely, the use of a Groupon by an established brand with multiple locations can be overwhelmingly negative. The use of these online coupons does not build brand loyalty; it has created a sub-culture of Groupon nomads. A Groupon nomad can be defined as a customer that moves from one restaurant to the next as online coupons become available. High quality products and service will create repeat customers; whereas an influx of one-shot price fixated customers will not help a concept thrive. Customer loyalty, great product and word of mouth recommendations are building blocks to a successful location. Coupons do nothing for brand identity; it lowers your brand merely to a price. A Groupon can fold a location into a pack of various restaurants to be consumed by nomads looking for savings. Quality of concept and product over price will separate your business from the pack.

In many cases companies with products held in high esteem by consumers have refused to compromise brand identity based on competitors’ business practices. This is brought to light by a case from the electronics world. A well-known audio equipment manufacturer protects its brand identity by not bowing to rivals sales tactics. The manufacturer of the audio equipment asserts in a side by side real world comparison, their product is superior and will not publish audio specifications for their speakers. Over the course of decades this company's brand has become synonymous with premium audio equipment for home, automotive and commercial applications. Next time you visit a restaurant or bar, take a look at the great sounding little speakers in the corner; chances are they are from a brand that protected its identity while choosing quality over price.

Emphasizing quality over price can build a customer base that will continue to frequent your brand and forsake others with coupons. The decision to use an online coupon to drive traffic to your business should not be taken lightly. A subjective restaurant experience will lead your customer to speak effusively to their friends about how much they enjoyed visiting your location. On the other hand an objective coupon driven experience could distill your brand to patrons dining based on price. Saving money is a concern these days; however brand longevity cannot solely be based on price. Price based marketing is best left to international vanilla mega-chains

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