The “group buying” or daily discount promotions offered online through Groupon, LivingSocial, and other players racing into the marketplace can be beneficial to your small business if done correctly….or disastrous to your brand and bottom line if done haphazardly.

Here are just a few tips to consider:

1.  Focus on the customer experience and be prepared to handle a crowd–Proper staffing the day your promotion runs is critical.  If you are ill-prepared to handle the rush of customers flocking in to redeem their coupons, your first-time customers could end up having a lousy experience and quickly become last-time customers.  You only get one chance to make a good first impression, so don’t blow it.  Be adequately staffed with properly trained employees who are eager and ready to convert these bargain hunters into loyal customers.

2.  Watch your margins–Do your math ahead of time to make sure the promotion you run is priced appropriately.  Remember, you are not only offering the customer a steep discount, but you’re splitting the discounted revenue raised from the coupon/voucher sales with the promoting company (e.g., Groupon) and possibly incurring other transaction costs (such as credit card fees) on top of that.  Unfortunately, many small businesses find themselves running money-losing promotions.  For a good article discussing some of the pros and cons of group buying promotions, visit

3.  Compare and contrast different providers–This area has become crowded with a regular stream of new entrants at the national, regional, and local levels, so do your due diligence to determine which company and program makes the most sense for your business.  A few relatively new programs in the Richmond market include: and