Who’s Buying In to Groupon, LivingSocial & the One-Deal-a-Day Business Model?

There’s a lot happening on the Internet these days. People are looking forward to checking their e-mails and following businesses on Facebook and Twitter all in the name of deals, not any deals for that matter, but the “one deal a day” type. One deal a day is a web-based business model in which a single type of product is offered for sale for a period of 24 hours…and operate within geographic territories.

People are not only checking their e-mails and reading online content about deals but business is reportedly up for Groupon, LivingSocial and their competitors. Techcrunch reports that people are buying coupons for restaurants, massages, discounted memberships to fitness clubs and museums, local activities, tourist attractions, and merchandise.

Marketing has always been about looking at demographics and understanding what sells in specific markets. Techcrunch states “You can tell a lot about a city by what is being bought on Groupon.” Apparently Boston residents love laser hair removal, Segways, and learning how to fly a helicopter. San Diegans are into Pole Dancing, unlimited carnival rides. Denver loves Cold Stone Creamery and Speed Raceway. Atlanta is into NASCAR and Chicagoans enjoy the Tall Ships.  The site has accumulated 3 million subscribers and currently manages roughly 40 markets. Groupon states that their customers are socially active, both online and off. 68% are between 18-34; 50% have a bachelor’s degree, 30% graduate degree; 49% are single, 33% married; 77% women, 23% men. 66% read Groupon write-ups every day and use Groupon primarily as a guide to explore their city. (see more about groupon’s demographics)

From a company’s perspective there’s really nothing to lose by signing up to promote a business on a “one deal a day” website. If the minimum number of people haven’t signed on, the deal isn’t on. One deal a day websites do the upfront work. Groupon for example, will write the copy which they say “ranges from the straightforward to the whimsical and bizarre.” A recent article in the New York Times pointed out that one write-up for a spa focused on trivia which related to the the spelling of “spa” e.g. Spackle should never be used as toothpaste and Spanky was the only member of the Little Rascals brave enough to donate his brain to science during World War II. As Times writer, Randall Stross says, “If good advertising is supposed to be memorable, this is very good.”

Groupon refers to the experience as “collective buying” and offers consumers discounts of 40 to 90%. Participating merchants collect 50 to 70% of the face value of the deal. LivingSocial takes the process one step further after you buy the deal by sending you a unique link to share. If three people buy the deal using your link, then your deal is free.

Will you consider using a service like Groupon or LivingSocial as a consumer? For your business? If you’ve used already, what have your experiences been like?

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