Groupon and LivingSocial are deal of the day companies. You sign up to offer a coupon or promotion to their email list and on their website. The deal is distributed and you watch the customers flock to your store. The unique coupon is easy to track and measure with tools the services provide, so you see exactly how much business you get in return for the promotion.
While neither require an up-front monetary investment (so doing a deal doesn’t cost you anything to get started), the catch is that they require you pay them a significant share of the money made from the deal. To boot, they encourage you to offer deals in the 50% off range to ensure they’re more attractive to customers. So you’re discounting, then having to share in the profits.
However, these companies have vast databases of users. If increased foot traffic is your goal, there’s a good chance you’ll get it using a daily deal site. But the sales pitch they give you is that you’re cultivating new customers by inviting in people who have never been to your store. While that’s accurate in most cases, the onus is on you to wow them with an experience that will keep them coming back. The majority of Groupon and LivingSocial users are simply coupon clippers in search of a bargain. You have to make their experience sticky enough to cultivate a true new customer.
Groupon and Living Social are similar in many aspects but each offers a few variances. Hopefully, the below will provide you with enough information to decide if one or both of these deal of the day companies might be right for your business.
Let’s start with Groupon.
Access:
Access for Groupon daily deals is available by signing in through Twitter, Facebook, or your email. They also have a mobile application.
Use:
Printed Groupon voucher or visible vouchers on mobile devices can be used for redemption.
Cost:
There are no out-of-pocket costs to be featured on Groupon.
Payment:
Groupon collects payment, circulates vouchers and then sends a check. 60 days is standard for a business to receive payment from Groupon.
Promotion Date:
Groupon decides when each deal will be featured based on metrics and past trends. Groupon gives notification prior to featuring any business.
Copy Points:
Groupon writes all copy points by incorporating various reviews from other sources to ensure that the posts written are engaging, entertaining and non-intrusive. Groupon welcomes suggestions.
Percentage Fee:
Groupon takes 50% of the sales to feature businesses. Sometimes this fee can be negotiated.
Word of mouth:
Groupon is typically shared with friends and family and provides a strong form of its own advertising.
Personalization:
Groupon gives you the opportunity to have deals tailored to your zip code, age and gender.
Email list:
Groupon has a privacy policy that restricts them from sharing the email list.
Now, let’s compare to LivingSocial.
Access:
Access LivingSocial via your email address, by logging in through Facebook, or a mobile app.
Use:
Utilize the voucher sent by LivingSocial either with a hard copy or on your mobile device.
Cost:
There is no out of pocket cost to be featured on LivingSocial.
Payment:
LivingSocial makes payment to business partners within a month of promotion.
Promotion Date:
LivingSocial provides advance notice of promotion date so businesses have ample time to prepare.
Copy Points:
LivingSocial give businesses the chance to review all promotional copy ahead of time and make any necessary changes.
Percentage Fee:
Percentage fee is negotiable.
Free:
If three people buy the daily LivingSocial deal using the same link then the person that originally shared the deal with others receives their deal for free!
Daily Deals, Family, Escapes and Adventures:
LivingSocial offers daily deals in several different categories to accomodate all types of users. They have family deals that focus on family-oriented activities like zoos, museums, day trips, aquariums, art classes, and more. They have escape deals that focus on travel and travel packages. They also offer adventure deals that include unique adventurous deals such as “Zen Escape Yoga Hike” and “Boulderand Brew Tours.”
Face to Face:
LivingSocial offers businesses face to face meetings prior to any promotion.
What’s New?
Both Groupon and LivingSocial have recently launched instant deals.
So What is the Difference?
As you can see, both companies are very similar. Because of the large number of similarities we recommend you speak to both companies when considering running a promotion.
- Find out which companies database and demographics are right for your brand in your location or locations.
- Negotiate the best deal possible.
- Find out how frequently each one advertises in your market.
- Case studies and testimonials are available for both companies.
- Talk to other people and find out the kind of results they have experienced as well.
- Make sure you are well staffed and stocked prior to launching either Groupon or LivingSocial.
Competition
There are many competitors in most markets offering deal of the days. Here are a few you may want to check out:
- www.tryitlocal.com
- Works together with Local Chamber of Commerce
- 10% goes to the Chamber
- 70% to local businesses
- www.yollar.com
- Deals are live 1-3 days
- Strong Media partners that advertise your deal
- www.signpost.com
- First deal you close, you earn 100% of the profits on the first $100 the merchant earns. After that, you get 30% of the profits.
- Browse for deals in your neighborhood by category
If you have questions about deal of the day companies join Exploring Social Media today! Also, see Jason Falls’s in depth look at The Good and Bad of Groupon and Small Businesses on Social Media Explorer.
About Mary Abrams
Mary Abrams
Mary is a Marketing and Social Media Strategist. She lives in Dallas, Texas. She is a marathon runner, happy owner of two wonderful labs and a proud alumni of both Southern Methodist University and West Virginia University. Connect with Mary: @mmaconsulting, www.mmaconsulting.net and http://facebook.com/mmaconsulting.
