In February, TD Canada Trust hosted a webinar called ‘Are deal sites right for your business?' which discussed the phenomenon of group buying and for what businesses it would work best. Group buying is the trend known from sites like Groupon where businesses offer products and services at deep discounts if a minimum number of people buy. If that sounds intriguing, the good news is that this webinar and other previous webinars from TD’s free small business webinar series are still available here.
The webinar featured Tim Corcoran of Toronto Community News, the company that supports group buying site WagJag. It featured a good discussion of what makes for a good group deal and which businesses are best suited to hosting a successful group buying deal. It also features segments from two business owners that have hosted group buying deals. The owners talk about the aspects that did and did not work for them.
Group deals can be a great way to acquire new clients and get involved in the web and social media. According to Corcoran, these are some of the things to think about when deciding whether group buying promotions are right for your business:
- How slim is your margin - can you afford to discount?
- Can you handle a steeply increased volume of business and still service existing customers?
- Would you have the ability to upsell a client when they came in? (Add a pedicure to a manicure coupon, sell the videotape of a skydive experience coupon)
- Can you provide additonal incentives to encourage the client to come back and start forming a pattern of frequenting your business
Definitely check out the webinar for a lot more information including the mechanics of group buying sites, how often you should participate, and common pitfalls.
There are lots of other good discussions on the strategy behind group buying deals:
- MyVenturePad did a more in-depth examination of the math behind group deals and took a look at an academic study on the effectiveness of Groupon
- ZooMedia doesn't think group buying is so great and has some arguments why
- Robert Ball from the Huffington Post thinks it can be key to a small business's social media strategy
- The Globe and Mail did a four-part series looking at the pros and cons
As always, the Small Business Accelerator thinks you should take the time to do research and decide if this opportunity is something that's right for your business. Comment or tweet us @sba_bc to weigh in.