Online Marketing with Group Buying Websites

Online marketing is not all about techniques and tactics that search marketing professionals are best suited for. As a matter of fact, some of the most effective marketing strategies involve little to no expertise or experience with things like Search Engine Optimization or Paid Search Marketing. One of these new mediums that we are referring to is Online Marketing through Group Buying websites. This strategy is quickly gaining traction as a truly effective marketing medium and we’re going to tell you all about it so you can start taking advantage of it yourself.

What are Group Buying Websites?

Group buying websites leverage the power of collective bargaining to provide attractive local deals that offer significant savings for consumers while also promising lucrative sales numbers to participating merchants. These local group buying websites, like Groupon, BuyWithMe and SocialBuy, have gained a lot of traction as they offer short term, daily deals that discount luxury items and everyday products all the way up to 50% off. Products and services offered tend to sell out within hours, thus making this a very attractive and affordable marketing solution for local businesses.

Group Buying Websites Defined

A business promotes their product or service on the group buying website (i.e. Groupon), typically marking down the cost of the item by 50%, sometimes more and sometimes less. For consumers to take advantage of this deal, a minimum number of buyers must also buy in. Consumers secure their position and interest in the deal by providing their credit card number. This credit card is only charged once the deal attracts the minimum number of consumers who sign up for the deal.

The business advertising their product pays nothing upfront and if the deal does not attract the minimum requirement of sign ups, then the business pays nothing at all. Once the deal is valid (i.e. the minimum number of participants is met) then the group buying site charges the consumers’ credit cards. The group buying site keeps a percentage of the sales as their commission, cuts a check to the business that advertised their product and sends a voucher to the consumer.

Top Group Buying Websites

To help you understand the viral nature of this coupon phenomenon and to get you thinking about how and what you can promote your products and services, we thought it would be helpful to provide a short list of some of the top group buying websites so you could start playing around with them yourself.

Groupon

This is the original group buying and coupon website that sparked it all. Due to its fantastic funding, Groupon offers the most local deals in the most cities across the US, thus making it the most popular option. An added plus of Groupon is that someone can purchase Groupons for their friends or buy gift certificates as well turning this service into a very nice gift option.

BuyWithMe

Although BuyWithMe still only has a limited presence in the US, this site is unique in that it promotes its daily deals through the social web. In addition, and to the advantage of local merchants, this service cancels any deals if the business promoting it does not obtain the sales volume or numbers that it requires.

SocialBuy

SocialBuy, relying more on email marketing to promote their daily deals, showcases special deals on local products and services from food to health products. A nice added bonus that this website offers is a $10 credit in SocialBucks for every friend referred to the service.

CrowdSavings

Very similar to Groupon, Crowdsavings assembles large online groups of people to leverage the collective bargaining power to obtain unbeatable deals and discounts on local products and services.

PriceBunch

Much like the other group buying websites, Pricebunch offers some fantastic deals. The reason we mention this one though is that it offers up some very useful testimonials and reviews for each daily deal so that consumers can make an informed purchasing decision.

There are many more group buying websites out there, and even more sprouting up everyday, but the ones above are ones that we have found to consistently be the most simple, effective and attractive to both merchants and consumers. Don’t just take our word for it though. Get out there and find the best collaborative buying websites for your local area and ask how you can get your business involved.

How to Market with Group Buying Websites

Thanks to the simplistic nature of this group buying / social shopping business model, this “How To” section will be one of the easiest to digest. Not having to think about how many characters have been exceeded in your title tag or how your deep anchor text link is being displayed by some webmaster, this “How To” can be explained in three easy steps:

STEP 1: Define Your Offer

Before you spend any time contacting group buying sites it is imperative that you pinpoint what you’re offering down to its most important details. Many times businesses will put out offers that may seem like a fantastic deal since the cost is being deeply discounted, but once consumers are lured in it is not uncommon for these consumers to find that their offer was just the “cheese in the mousetrap” to spend up to two or three times as much as the offer advertised.

This is obviously a plus for many business, but remember that group buying is also social shopping. Anything social on the web now can also become extremely viral, good or bad. Just make sure your deal is desirable, transparent and inviting. If you can combine those three things into a promotion then you will successfully leverage any group buying website.

STEP 2: Find the Best Group Buying Website for Your Area

Now that you have chosen your promotion, the next step is to find your promotion portal. Although there are tons of group buying sites out there to choose from already, it is important to make sure that you select the best website for your local area and promotion.

Here’s a handy Group Buying Website Comparison Chart to help you make the best choice for your area and business. Groupon.com is the most popular to date, but this does not mean that other websites cannot provide you with the same upside, if not better, so do your homework.

STEP 3: Signup / Contact the Group Buying Website of Your Choice

Once you have narrowed down your choice, simply go to the website, find the “Business Owners” or “Advertise With Us” link (usually somewhere towards the bottom or top right corner) and enter the necessary information.

Some sites like BuyWithMe.com let you simply complete a form right from their website. Other sites, like Groupon.com, can sometimes require a phone call first to make sure that your business / services are a good fit for their audience.

Once you’re signed up and your promotion is running then sit back and watch the cash roll in.

Group Buying Promotion Success Stories

Like most business owners we’re sure you would like to see / hear some cases where businesses actually did well with their group buying promotion efforts so we have provided a few for you here. Before you spend any of your valuable time researching and using these group buying websites make sure that you feel comfortable doing so and also that this model fits what you’re selling.

CASE STUDY 1

COMPANY: Wendella Boats & Chicago Water Taxi
PROVIDED BY: Gregg Pupecki (Sales and Marketing Director)

Gregg’s company sold more than 5,000 discount tickets on its first Groupon promotion and 20,000 on the next, which gave people a 75 minute tour of the architecture lining the Chicago River.

Gregg says, “I think Groupon is one of the best sales and marketing tools to come out since the Internet. Groupon is something any business owner or marketing manager can do themselves, no matter what size the company is.”

CASE STUDY 2

COMPANY: Red Velvet Cupcakery and Tangy Sweet Frozen Yogurt
PROVIDED BY: Tracy Wilson (CEO)

Red Velvet Cupcakery offers $50 gift cards for $25 on LivingSocial.com three times a year. These promotions each bring in about $20,000 to $30,000 (about a week’s gross sales).

Tracy says, “It gives you a no-muss, no-fuss way of marketing your business without any major commitment.”

We would love for you to be our next case study so do some research and try promoting your products / services on one of these group buying websites.

Is Social Shopping the Future for Retail?

Social shopping may just be a trend right now or it may actually be the way that consumers come to expect retailers to sell their services; either way, it has proven to be effective, cheap and extremely viral so it’s worth trying out for now. Who knows, maybe it will end up producing a much return higher than your traditional print marketing, or even your search engine marketing efforts.

What do you think?

If you have any questions, comments or cases that you’d like to share with us, then please do so by leaving a comment below.

  • vinnylabarbera

    After posting this article one of our readers was kind enough to share a story featured on Mashable that provides another case study of how people, even athletes, are using group buying websites effectively.

    Here's the article: http://mashable.com/2010/05/24/stoudemire-faceb

    Do you have any success stories yet? We would love to hear them.

  • becham

    Really nice feed back has been received about the research of group buying promotion efforts.I believe that without taking the risk you cannot even promote a match box,as its has been proven that the most critical point of the product failure or success is at the beginning of it.
    Hence proved Achievers do not think about the end result they focus on the beginning, smooth beginning ends up with successful ending

  • Jennifer G

    http://livingsocial.com/ is also another big one that is starting to become more popular

  • LindsayT

    Personally, I think CBSlocal is the best site for this online group buying as it offers the best deals!

  • http://twitter.com/calgaryrelish Michelle Hernandez

    WagJag.Com is another great one for Canadians!

  • Anonymous

    Thanks for the tip!

  • Barbaragabogrecan

    Thanks for writing this. I really feel as though I know so
    much more about this than I did before. Group buying websites leverage the
    power of collective bargaining to provide attractive local deals that offer
    significant savings for consumers while also promising lucrative sales numbers
    to participating merchants. These local group buying websites have gained a lot
    of traction as they offer short term, daily deals that discount luxury items
    and everyday products all the way up to 50% off. Products and services offered
    tend to sell out within hours, thus making this a very attractive and
    affordable marketing solution for local businesses. Your blog really brought
    some things to light that I never would have thought about before reading it.
    You should continue this, I’m sure most people would agree you’ve got a gift.
    Thanks for sharing…

  • Kevin Mckeever

    Thanks for the great information, I will be using your guidelines and your tips THANKS AGAIN!

  • Deb Glassman

    Is there a website that offers businesses a chance to group together to buy products and services for use in business…
    i.e.  computer software programs, computers hardware and software???, office furniture,etc? thanks.

  • Anonymous

    The only one we have been able to find is GroupPrice.com. There is definitely a necessity / market for this so it will be interesting to see how GroupPrice does and who else will jump into this space.

  • john yaeger

    It’s great to hear success stories of businesses using online daily deals. It just proves that with the right ingredient to tap this avenue, everything works out just fine.

  • Natalie Tinti

    This is very useful information. Thank you for sharing!