MBA1924 Selling Your Product or Service on Groupon

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Visit Dell.com deals. Hey O. Welcome to the Hundred Dollar MBA show because your business needs you at your best. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's lesson you will learn all about selling your products and services on Groupon. Whether you're a physical business selling products and services like a restaurant, a spa, or an online business selling digital goods and services like online courses or coaching, Groupon might be a way to reach the masses. In today's episode, I'm going to walk you through the process of getting your product or service on Groupon. What are the pros? What are the cons? Can you actually make some decent dough? Is it worth the effort of putting your product and promoting it on Groupon? I'll be sharing my own experience of putting our product, the $100 MBA program on Groupon a few years ago and I'll be sharing the unvarnished truth. If you are looking to be a part of one of the largest marketplaces in the world to get your brand out there, then keep listening. Can't wait to get into this one. So let's get into it. Let's get down to business.

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Groupon is an absolute commerce beast. They get nearly 31 million visitors a month to their website or app that they are the original deal site behemoth. And that's why so many businesses local and online try to get on Groupon. Now, I've had extensive experience as a merchant on Groupon, selling my product on Groupon as well as a customer. I've bought and used so many Groupons over the years, and overall the whole experience is quite delightful actually for many local businesses and services, they see Groupon as a way to get people through the door, to get exposure, to get access to a large audience so people can know about them. I've discovered amazing resorts, restaurants, experiences that I never heard before in my local area and abroad because I found out on Groupon, I bought a Groupon, I had that experience, and guess what? I went back to those places without a Groupon because I had a lovely experience. And that's the whole idea of Groupon. Groupon is offering you exposure, helping you to get a customer through your doors. Whether it's a physical door or a virtual door on your website, your job is to earn that customer's trust, to win them over, to delight them so they can come again and again. Having said that, you have to see it in that light. You got to see Groupon as a customer acquisition tool. It's not necessarily a place you're gonna make a instant massive profit from one sale. Let me put it this way. If you break even on the Groupon deal, meaning you don't make any money from any customers that buy a Groupon deal, then you are winning because you just acquired a customer for free. Whereas if you ran ads like Facebook or Google Ads or any kind of marketing to acquire a customer, you would have a cost per acquisition. You have a cost to acquire that customer. This is why you see so many amazing deals on Groupon, because the business realizes, hey, Groupon is getting me customers and I might not see that first interaction with my customer, that first exchange as a profitable one. But, but now I'm building rapport and hopefully people will come back to me. Now there are some businesses and products that actually do make a profit through the Groupon deal after Groupon gets its cut. Speaking of cut, let's talk about how Groupon structures the deal for the merchant. You and a representative from Groupon will negotiate a deal. They will take a certain percentage of the price that the customer pays. Groupon is collecting all the money and then they'll pay you out. Things might have changed since I ran the Groupon, but it's about 60 days out when you'll get paid. So say for example, you're running a deal that is $50. Groupon is going to collect the $50 from the customer and they're going to take a percentage of that $50. That's the rate you're going to negotiate with Groupon. It could be 30%, 40%, 50%. Depends on a lot of factors and things change all the time. But let's say it's 50%. That means Groupon is going to collect $50 from the customer, take 25 and give you 25. Now part of being on Groupon is having an exclusive deal. Like Groupon doesn't want you to be on their platform if you're not going to give a really good deal that they can only get on Groupon. So if you're selling your product on Groupon for, you know, a minimal discount, it's not really going to make waves. And Groupon's really not going to be interested in listing your product or service. They want a wow deal. So what many businesses do, and this is what we did, they create a specific version of their product or service that's for Groupon. Let's say you're a dentist and you do whitening services and your full fledged whitening service may take four weeks and cost, let's say $500. That's if somebody just walked into your dentistry. Groupon wants a deal that is exclusive and very, very attractive. So you might say, hey, my winding services are $100. Now it may not be the full fledged four week version. It might be the express version, something you create specifically for Groupon. It might be two sessions or two and a half sessions. And the deal on Groupon is $100. Now we're talking Groupon will be interested in that because it's a really, really attractive price. Now your job is once you get the customer to buy the Groupon and come through your doors to is to upsell them is to become their now new dentists, right? Do all their checkups, do their X rays, fill their cavities and top up their whining services when they need it. This is what Groupon is great for. We did something similar with our digital product, the $100 MBA program. We created a core hundred RBA program that wasn't the full fledged program, but had some really great courses in it. And then once they signed up, we were able to offer them other coaching, other products and other services. So again, Groupon is primarily a customer acquisition model and not really a place for you to really make lots of money. Now having said that, the volume of sales is huge in Groupon. I was shocked how many people signed up for our deal. We're talking thousands upon thousands over a course of six months, I believe we got like an influx of 6,500 students. So they definitely have reach. And one of the things that Groupon does is they don't launch their deals across the world in one shot. They test the market out, they maybe tweak the price, tweak the imagery, then they expand to another market and another market. They're quite sophisticated in that regard. But in my experience, it's a fantastic way to get exposure to a new audience because they have so much reach. Not only do they get 31 visitors every month, month to their site, they have 43 million users that use their app, whether it's the web app or the mobile app. So they're getting notifications, they're getting emails, they're getting promotions sent to them. So you are getting access to lots of people. So let's address the question, how do you get on Groupon? How do you reach out to them? What do you do? So I've spoken to some people that have reached out to Groupon and got on Groupon and I also had my own experience where Groupon approached us and they said they wanted to feature us on Groupon. In both scenarios you need to have some level of credibility. Groupon will back a business. If you have some sort of write up, been mentioned on some article like on Forbes or Inc. Or your local newspaper, you need to have some decent reviews on Google or TripAdvisor. If you're a local business, they rarely do business with a totally fresh product or service or business for that matter. They want to make sure they're backing somebody that is going to be able to deliver and has a track record. If you are approaching Groupon and by the way, you can literally just go to their website, go to the footer and use the links to find their email, their contact and reach out to them. They'll find the right person to get to you. Their whole bread and butter. Their whole business is based on deals and new businesses and new products and new services. So you're not going to be ignored, but you need to present yourself in a way that you won't be ignored, where you say, hey, this is my business. This is my product. I'd love to be on Groupon because xyz, here are my credentials, here's what other people say, here are my reviews, here are my mentions in media. This is the time to boast, okay? To show your best self. You also want to mention why this would be a win for Groupon. Why do you think Groupon needs your product in their marketplace? What's in it for them? For example, if you're on an indoor miniature golf center and you notice, hey, Groupon, you don't have any golf or miniature golf deals in my local area. There is zero competition on your site when it comes to this product or service. This is going to be super attractive to them. So again, you are going to state something that gets them enticed, gets them thinking, hey, that's a good reason to say yes. Groupon loves stackable deals. Meaning, like, there's many options, there's many ways to spend more on the deal. This is why, if you see, like, getaways, they'll have, like, this room that is, you know, the garden view, it's this price. This room that's got a partial ocean view is this price. This one's a full ocean view. They love those kinds of deals because it encourages the buyer to spend more. And you could do the same for your product or service. Have tiers, have levels.

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To wrap up today's lesson, Groupon has incredible reach, especially if you're a digital product. They can really sell your product around the world. But even if you're a local business selling to local customers, you'll be surprised how many people still don't know about you even after years of being in the neighborhood. And Groupon can solve that for you, even if it's at cost, meaning you don't make money on the actual deal. It's a great customer acquisition model, and in my experience of working with them, they're incredibly professional, highly supportive, and they really, really help you get the most out of your Groupon deal. I worked with many deal sites, and not all of them are like that. Thanks so much for listening to the Hunter LBA show. If you love what you hear, hit subscribe so you don't miss an episode. By hitting subscribe, you also get access to over 1900 business lessons in our archives. Before I go, I want to leave you with this. Companies like Groupon, if you can work out a deal, even if you're giving more than you feel comfortable with, can help you big time. Why? Because they win when you win, right? When you sell lots of your product or service, they win as well. So they incentivize to sell as many units as possible. They're also quite experienced and know what is a good deal, what is going to sell, what's the sweet spot in the price, because obviously they want to get a bigger cut too. So it's not about just dropping the price as low as possible. So don't be afraid to take their cue when it comes to working out a great deal. That wraps up today's episode. I'll check you in tomorrow's episode Q and A Wednesday where we answer the question how do you hire for skills you're not an expert in? We get to the bottom of it in tomorrow's episode. See you then. Take care. Hey Fidelity, how can I remember to invest every month?

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