Since their start in 2008, collective buying sites have multiplied in number. Now, there are many of them around the world, covering every city where online buyers are present. The idea of collective buying was first conceptualized by Andrew Mason, the author of Groupon, a company owned by ThePoint in the U.S. Coined from the two words “group” and “coupon”.
Groupon’s marketing strategy is to give discount coupons to a group of online customers. With collective buying, products are sold on a wholesale basis thus making businesses thrive with a number of deals each day.
Notably, the idea of group coupons allows businesses to spend less on advertising. Appearing as daily deals, the product or service can be seen on Groupon sites where customers can learn about it. Considering the way Groupon displays the deal of the day, this form of advertising is even better than that which appears on TV. However, only those who visit the site or subscribe and receive an e-mail notice, will see it.
It seems much growth has taken place from links on social networking sites have been effective in spreading the word about “the deal of the day. Likewise, customers can search for Groupon deals in their city to ensure validity of the coupons that they will get. To find great deals, customers should key in the word “Groupon” and their state or city or vice versa, e.g., Groupon NY, Groupon DC, Groupon SF, Austin Groupon, London Groupon, etc. These keywords should return results for the particular Groupon site they are looking for.
Referrals from buyers also work as a marketing strategy at Groupon. Buyers can refer friends who may be interested in buying the same product they did. The good thing about this is that every referral earns the buyer $10 in Groupon bucks to be credited to his/her account. These bucks can only be used in purchases. As such, instead of just buying or getting deals, customers also get to earn something from Groupon. Imagine referring ten friends for a deal in just one day. That could earn one $100 in future purchases by just giving referrals. This is what attracts many online buyers to get deals from Groupon.
Other sites such as BuyWithMe and LivingSocial, which offer low-priced deals are being left behind because of this Groupon opportunity. Particularly in BuyWithMe, customers can also get a $10 credit but this is good only after referring a first-time buyer.
Recently another company by the name of The Customer Advantage has entered the “collective buyer” market. They have a much higher incentive for their subscriber base beyond the Groupon bucks program and are in fact promising to pay a significant portion of their earnings back to those who refer and promote them to their friends.
The Customer Advantage has also set their program up in such a way that it makes a great fundraiser for any organization looking to raise significant funds.
Getting things at discounted prices makes the deals very attractive to online customers. Unlike in other promotional sites where some purchases are on sale while others are not, all things that go on Groupon sites are discounted. Discounts are quite big, ranging from 50%-70%, so it is recommended to check their sites once in a while to see the best deals they have. With the way collective buying sites work, it will not take long before online buying becomes a better way to make purchases.
The success of Groupon and other sites like The Customer Advantage will eventually change the way we live. In the future, let us hope that Groupon, BuyWithMe, LivingSocial and The Customer Advantage and other online sites will be able to make deals with every establishment in each locality so that people could have discounts on practically everything they buy. Thanks to Andrew Mason, the creator of Groupon, the discount genius!
The Customer Advantage