Many companies are now perceiving coupon-based services as the magic bullet to grow sales online. Sites like Groupon, LivingSocial and BuyWithMe will feature your business in their newsletter and bring you new customers instantly. But is that really how it works? 

In this episode of the Weekly Marketing Cast, we discuss the advantages and challenges of using coupon-based services for Internet marketing.

It’s Just Advertising

“In history, there has always been a new form of advertisement,” says David Meerman Scott referring to radio ads, TV ads, online banner ads and the like. “Groupon is another form of advertising. You have to pay money to get your product in front of people." There is always going to be someone who owns an audience and whose business model is to sell access to that audience in the form of advertising. 

The Challenge: Big Investment & Risk

The challenge around using coupon-based services is really two-fold. First, as a result of the advertising model, a business would pay money for accessing the site’s audience. But another issue is that businesses are at risk of cheapening themselves. Your existing customers, who pay full price for your product or service, might feel betrayed when they see that you are offering the same product or service at a discounted price. It changes their opinion of your brand as well as their experience with it.

The Solution: Create Your Own Audience 

“Why not create your own audience?” asks David. That would be the solution to growing your customer base in the long run and with smaller investment. Today, you are equipped with the same tools that coupon-based services have access to—a website, a blog, email marketing, social media... While building your own community takes time, it is a much more valuable form of getting exposure and growing your sales. 

Have you tried out any of the coupon-based services? What has your experience been?

Originally published Jun 13, 2011 9:00:00 AM, updated June 10 2021


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