Group Coupon Sites Abound

In addition to Living Social, which has just launched a local coupon effort, we’ve learned of three other group coupon sites: Groupon, whose tagline is “collective buying power;” Boston-based BuyWithMe,whose tag is “Let’s Get It, Together”; and What’s the Deal DC.

Groupon, the pioneer, is a 40 staffer, Chicago-based site launched by The Point, a company dedicated to collective activities, such as political fundraising. Its Chicago site was launched in November. It is now available in 24 main cities and has 500,000 subscribers. The site has 50,000 subs in DC alone.

The way it works is that subscribers just click “BUY” before the offer ends at midnight. If the minimum number of people sign up, they get a printable gift certificate in their inbox that can be used whenever they get around to it. If not enough people join, charges aren’t processed.

What’s The Deal DC, meanwhile, has attracted 1,500 customers since its launch last month. Among other things, the five person operation works with food bloggers to offer deals on recommended restaurants, and also throws sponsored happy hours with bar clients.

10 thoughts on “Group Coupon Sites Abound

  1. Expect to see a bunch more of these pop up, as the technological barrier is so low. These deals should skew to services (and other very high margin businesses) that can offer the deepest discounts.

    Would be interested in learning what the economics of these deals look like between the sites and the SMBs. I assume the minimum is simply a technique to encourage virality, and is not really a sticking point?

    Also to add, a spa-only version of this – – popped up recently.

  2. Coupons, schmoupons–as usual, nobody is talking to the customer (the SMB) to see if he or she is going to pay for this service, and then re-order/re-new again.
    Have you seen the “discussions” on the various Groupon Deals? In San Francisco, you have a bunch of people arguing whether four Yoga classes at $10 each over three days is a better deal than three Yoga classes at $7.50 each over five days.
    It’s enough to make any business owner run screaming for the hills–who wants to deal with these “empowered” cheapskates nickel and diming them every step of the way? SMB’s also know they’re going to get badmouthed on Yelp if these customers don’t get it for free, or close.
    So what if “the technological barrier is so low”? The fundamental, insurmountable problem with these local coupon sites is that most businesses DON’T WANT these customers, and even fewer businesses will actively advertise/pay to reach them! So where’s the on-going revenue stream?
    Groupon and 99% of local coupon sites will be gone by the end of the year, because of zero margins and little or no repeat business.

  3. The above post couldn’t be more wrong. This is exactly what small businesses are looking for and it’s not just cheap skates who love deals and use coupons. After 30 years in sales and marketing of advertising, especially to small local businesses, I can tell you that these companies are going to do exceptionally well as are the advertisers who use them.
    A recent Groupon deal in Indianapolis brought in 215 new clients to a dentist. Now think about the lifetime value of a new dental patient. The office had no ad cost and probably covered their out of pocket expense by the sale of the coupons. The profit margin is HUGE and I bet they will run this deal again and again.

  4. I agree Trusted…many businesses fall short to realize how powerful and important coupons are and the positive impact they can have on any business, offline or online!

  5. I use and enjoy these coupon sites. I like a good bargain, but if I happen to find exceptional quality in the process, I will pay for exceptional service or product in the future (without the “deal”). I think it’s good advertising!

  6. I use and LOVE these websites. My co-workers and I discuss the deals we receive via email everyday. We have often purchased these deals and if something is great – we go back for me. A lot of small businesses have increase their revenue in a crazy way when you think about some deals that sell 500-2500 in just one day. As mentioned above, people will now go back again and again and it doesn’t really cost the business owner thast much money for all the new customers they now have. Keep it up Groupon, Living Social, Half Off Depot, etc and I’ll keep buying!!

  7. We just did one on Living Social and it has really helped give us a boost for the summer. We are a small business with a very limited market, also, being the only business in town who does wine tours, this really brought awareness. I think if you were a salon, you may not get loyalty. I will say the margins are SLIM!

  8. SO I know everyone here is a fan of these sites. But honestly, I found one that pulls together the best deals in my town better than anything I’ve tried before. You may not believe me but its better than Groupon. It’s no copycat, it’s the real deal (no pun intended) and it’s called, try it out and you’ll be glad you did.

  9. Deal-a-day programs are a great way for small businesses to drive new customers through their doors. But once the campaign is over, then what? Getting those bargain hunters to repeat is the key. makes coupons available every day all year long from local businesses.

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