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SmB Digital Trends: Groupon, Google Offers & Facebook Deals

Small Business Trends: Groupon, Google Offers & Facebook Deals

Groupon burst into the scene of business client relationship in 2008, and changed the advertising model. It’s mindboggling rise in 2010 is proof they’ve hit the jackpot – an uncharted territory of local businesses and internet users. The virtual world and the physical world intersecting with each other.

A deal-a-day website, Groupon focuses its attention on the buying power of the surge. Every day a new deal in a specific area is advertised, announced by e mail to users by geographic location. The deal offers deep discounts – between 50%-90% off the regular price, and it can be made on merchandise or services (diving lessons for example). For businesses, even though the margin of profit shrinks, the deal has the potential of brining in many new customers and creating repeat business. For the customers it is an opportunity to buy something at a drastically reduced price.

Groupon’s scouts reach out to local businesses they deem worthy and offer to make a deal. Today, Groupon has scouts in over 300 markets in 35 countries, looking for businesses that meet their standards. There are some businesses they stay away from; shooting ranges, abortion clinics, plastic surgeons and strip clubs to mention some. Groupon has a subscriber base of 50 million members.

Forbes Magazine said about Groupon, as was quoted in The Wall Street Journal “We are projecting that the company is on pace to make $1 Billion in deals faster than any other business, ever.”

With the success came attempts by bigger companies to buy them out. Yahoo was rumored to make an offer, which was rejected, then, at the end of 2010, Google offered to buy Groupon for $6 billion. The offer was rejected in December 2010. It is rumored they are preparing for an IPO that can bring in as much as $16 billion.

Google didn’t wait long. At the end of January 2011, Google announced a new product which is in its testing stages. It is called Google Offers.

Google Offers

On January 20, 2011, Google announced on their blog “… a new product to help potential customers and clientele find deals in their area through a daily e mail”.

On the surface it seems to be the same deal as Groupon, but those who saw the program say it is a different model.

It will be an extension of their Google Coupons. You can see it if you google: coupons site:maps.google.com intitle:Google Offers. There you’ll find a list of coupons for businesses according to the geographical location. As you can see on the page, it is not very attractive and it is not easy to find deals in your area. But, if Google will let you know the deal in a daily e mail, incorporating their Gmail service, their potential customer base is enormous.

Opportunity? – With google shifting to local search results in Nov 2010, it might set the stage for a local offer to be ties into the search results in a big (or popup) way! Currently for as little as $25 a month Google places lets business owners produce a deal or coupon special, but this is likley just the begining.

Nate Tyler, Google spokesman, sent this statement a few days later:

“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”

And they are not alone. Where Google goes, so does Facebook (or vice versa).

Facebook Deals

Millions of people use Facebook Places to tell their friends where they are at a certain moment. Now Facebook is going a step further and launching an additional program for smartphone users called Facebook Deals.

We all like to feel we got the best deal possible, especially when it is shared with friends. Starting in November 2010, when you ‘check in’ to a business page on Facebook on your computer or mobile phone, you will see notations if the business is offering a deal. Clicking on it will show you the type of deal this business is offering.

Facebook Places lets you share where you are with your friends and see where they are. With Deals you can also see which businesses offer discounts in the area you are and share that information with your friends. When you go to the establishment, all you have to do is show your phone to the cashier to get your discount or gift.

There are 4 kinds of deals Facebook Deals is offering: Individual, friend, loyalty and charity.

  • Individual deals offer discounts or rewards for you, like a free cup of coffee, a free entrée etc. When you check in you get the offer for yourself.
  • Friend – You have to bring your friends with you. Tagging a number of friends to a business will get all of you a discount or free stuff (like a free T shirt in a rock concert). But you have to be in the company of all those you tagged.
  • Loyalty deals – a local establishment can offers deals that are similar to the punch-in cards, in the vein of buy 5 and get the 6th one free.
  • Charity deals – The establishment will donate money to charity when you use their services.

Since the end of January 2011, Deals is available in the US, Canada, France, Germany, Italy, Spain and the UK.

Which system is best for your business? It depends on your niche, what a surge on clients can bring, or whether you want it to be a one-time deal or an ongoing discount for repeat customers. But one thing is certain – all those offers open a new way for businesses to advertise themselves to customers in their physical area.

Sources:

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