It all started in the United States with Groupon, a service that pioneered collective group buying. Based on Groupon’s success, Australia has seen a range of copy-cat services such as Spreets, Living Social, Cudo and Ouffer, which promise you hundreds of new customers for your compelling offer, and have led to some great results for small businesses.
How it works
The premise is simple. As a business owner you agree to offer your product or service at a discounted rate, but only after a certain quantity of sales are guaranteed. For example, you might sell a hair and make up package normally worth $150 for $29, but only if over 300 people agree to take up the offer. Once that threshold is reached, the deal is on and you are guaranteed over 300 paying customers.
The short-term loss of discounting your product or service is made up for by the long-term gain of having a large volume of new customers experience your proposition.
What’s in it for them?
Collective group buying sites generally profit from taking a percentage of the group deal. The percentages vary depending on the site, and need to be considered when calculating the financials around your offer.
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What’s in it for you?
If your business could benefit from selling your products or services in high volume, or from an influx of repeat customers, a collective group buying offer is a very compelling proposition.
The collective group buying sites market deals to consumers through email marketing and a number of social networks such as Facebook and Twitter. Some of them have lists of tens of thousands of potential customers looking for a compelling deal. Even if only a small portion take up your deal, you’ll still gain the exposure and word of mouth from the site’s large user-base.
Many of the group deal sites encourage their members to share deals with friends and family, further helping your exposure through word of mouth.
If you’re looking for a great way to gain hundreds of new customers, increase your exposure and grow your business collective group buying might just be the deal you’ve been looking for.
If you’ve tried collective group buying please share your results with us. We’d love to know if it’s worked for you.