3. Who are your customers, and do you operate in a saturated destination where there’s plenty to do?
Some businesses choose to do Groupon based on whether their competitors are on the platform. But in destinations with multiple, diverse activities, it’s increasingly tougher to define who your true competitors are. The same customers that might try your adventure park could also be interested in a concert, a beach trip—you name it.
So, instead of looking to your competitors, look to your customers. The only way to distinguish your offering is to know your customer intimately, and speak to her effectively. You must develop a firm grasp on your ideal visitor—what does she see, feel, think and do in her life as it relates to your offering, and how can you use those insights to inform your marketing and business strategy?
Groupon’s vast customer database might be able help you reach this person better. But consider a different tactic if you find that Groupon isn’t broadening your audience enough to justify the costs, or if it’s broadcasting your deals to an audience that doesn’t fit your target demographic.
Groupon has access to millions of inboxes, a perk that draws smaller or new businesses like a moth to a flame. But don’t be fooled, you don’t want your deal in just anyone’s email; you want it going to the right ones.
And if you’re a smaller or new business, you should be even more judicious about finding the right customers, not less. As I mentioned earlier in this series, zip tours tend to be more vulnerable to bad Groupon reviews if they haven’t already made a strong footprint on TripAdvisor.
4. What’s your volume like in the shoulder seasons? Do your guides need a steady flow of traffic to stay trained and practiced?
Let’s be clear: reaching a big audience is just one of the ways you can use Groupon for your zip tour or aerial park. Jack Sharp of Sky Valley Zip Tours, for example, uses Groupon as an incentive for his employees.
“After I get my employees trained, if we’ve got traffic right off the bat, they’re more likely to stay with me, be happy, and be ready for high season,” Sharp explains.
It’s a smart move, considering that the quality of your guides affects everything about your tour—volume, safety, and, of course, customer satisfaction. Though Sharp might not make money on every Groupon buyer, he feels that having engaged, practiced guides makes up for it in the long run.
In other words, Sharp uses the flow of customers from Groupon as an early investment in his guides, and therefore his tour. Once he gets Groupon buyers through his doors, he tries to upsell them with longer zip tours or added merchandise.
He also only offers Groupon tours in the spring and fall, when he’s less busy. That helps ensure that the Groupon deal doesn’t “cannibalize” his existing customers. In the summer, therefore, when Sky Valley is at its busiest, every visitor pays full price.
Groupon Series Conclusion
Most people initially see Groupon as “easy money,” warns Cummings, but it’s not. Before pouring your budget into this platform, it’s important to know why you’re choosing to do so. Is Groupon the best option given your specific goals? I hope the points that we’ve outlined in this article help you answer that.
As I stated at the beginning of this article, there is no silver-bullet answer to whether your business should use Groupon. But since I can practically hear the disappointed sigh coming from your side of the screen after that statement, here’s my rule of thumb:
Based on Groupon buyers’ behavior on TripAdvisor and on input from zip tour owners and other experts, I would generally not advise Groupon as a strategy for new or small businesses.
Overall, it helps to have a strong reputation on TripAdvisor before bolstering your customer base with Groupon users. That means tours should have their operations and customer service dialed before opening the Groupon floodgates to avoid any unnecessary, negative feedback. Moreover, Groupon’s take can be large in many cases, so the smaller your margins, the harder it will be to extract value from this partnership.
But if you’re the exception to my rule, I welcome you to test your Groupon strategy and let me know how it goes!