By Mary Owen
In today’s tight economy, some local businesses are getting their Groupon.
Allison McKenzie, executive director and enterprise facilitator with Grow EDC, said online coupons such as Groupon, DealChicken and Living Social are helping some small business owners attract new customers. “If the goal is to get more and new people in the door, it can work like a charm,” McKenzie said.
Jahn and Sheila Hoover, owners of Into the Wild Equine Adventures in Mill City, used both coupon options last summer with what Jahn called “astonishing results.”
“We sold 82 two-for-one rides on Groupon and 158 through Living Social,” Hoover said. “There was no better way to get our offer out to all those people, and we were busy all summer long with not only those riders, but with several local families as well. We had no idea that trail riding would be so popular, and are excited about the possibilities.”
The Hoovers took 752 people on rides during the 2011 season and anticipate more.
Nancy Hendricks with Fresh to You Produce in Stayton has used Groupon twice and DealChicken once.
“To be honest, if the locals would support the local businesses, including mine, more frequently, I would not need to use Groupon,” Hendricks said. “As it was, it was a good experience. We sold hundreds and introduced our store to many people who are now aware of us.”
Hendricks said she would recommend coupon use to people looking to increase their base.
“It was expensive,” she said, “but I look at it as advertising and marketing dollars.”
Groupon and other online coupon options work by offering the coupon online to a database of subscribers and taking a percentage of the sales from the coupons sold. The business receives the remaining funds earned from the sales.
“This varies, so a business might only get 25 percent in dollars for a product or service rather than the full 100 percent they would get from a non-Groupon or other coupon user,” McKenzie said. “The idea is that you are attracting new customers who will buy more when they visit or use the services again.”
McKenzie said online coupons make sense if, like Hendricks, business owners think of them as a marketing expense rather than an immediate cash-flow infusion. Coupons may also entice customers to return to a business, generating extra spending by the rest of their party, or re-energize existing or past customers, she said.
“You might think a business is just getting an existing customer in the door for less money if I buy one,” McKenzie said, “but it’s also a reminder for me to go there again if I haven’t been in awhile.”
McKenzie thinks online coupons promote deals, and people are looking for savings. Often new customers buy again without an online coupon, she added.
Additionally, she said, many business owners mistakenly assume that only “poor” people use coupons, “when in fact, people who use coupons or special deals tend to be college graduates and make a fairly nice income. So the Groupon customer is also likely from an economic standpoint to be a good match, depending on the business’ target market.”
Mckenzie said target marketing is something she often discusses with GROW clients.
If their market doesn’t use or own computers, it wouldn’t make sense to do one, she said. “But, if like Jahn and Sheila, their market is well-heeled nature or horse lovers looking for outdoor entertainment, and we know that Highway 22 attracts a lot of visitors from the Portland area on their way to Bend, for example, it makes sense to offer a Living Social coupon in the Portland market for their trail riding business.”
