Jen Best admits she isn't the most technical person in the world, but when her website designer suggested in June that she check out a new service called Groupon she was curious. After spending thousands of dollars on traditional advertising, without much success, she was keen to promote her tea shop to a brand new community. The 34-year-old entrepreneur sifted through the group buying site for a few days, and like many of the site's members, she got hooked. Best contacted Groupon and then went through the process of applying to get Steeped and Infused as one of the site's daily deals, which she says involved a lengthy selection process to determine if her brand was a good fit for the service's 130,000 Toronto subscribers.
On Tuesday, Groupon featured Best's shop, offering a $20 gift coupon (or “Groupon”) for just $8. Best admits she thought they might reach a couple hundred orders, but by 8 a.m. on Deal Day, 350 buyers had already signed up. By midnight, when the promo ended, consumers had bought 950 certificates.
“It's the most effective marketing dollars I've spent yet, “ Best says. As for the revenue split, Groupon takes 50 per cent of the money paid for the coupon and sends Steeped and Infused a cheque (Best didn't have to pay any money upfront).
Groupon is an amazing success. The site launched in 2008 and although the company is based in Chicago, they now serve more than 13 million subscribers in 29 countries. The company is your classic overnight success story, and is bound to explode into the public consciousness thanks to a recent Forbes magazine article that calls it one of the fastest growing computer companies ever. (An interesting aside -- still in its early days Groupon’s twitter profile only has a little more than 7,000 followers. Check back in a week to see how that’s changed).
Just today, the site's founder and CEO Andrew Mason is speaking in Vancouver about a Gap deal they featured on Thursday (a $25 coupon worth $50 credit in any North American Gap store), which was Groupon's first national promotion. According to some reports, Groupon sold more than 445,000 vouchers, leaving them with a hefty profit.
Today is Best's first anniversary at her Leslieville store (there is another Steeped and Infused in downtown Toronto, which is licensed to another owner). As she explains, it's not easy for small businesses fighting for pedestrian traffic in an up-and-coming neighbourhood, so the Groupon deal was like marketing magic. The tea promotion was such a success, Groupon has invited the shop to be a platinum member, which means they can do a featured promo twice more within the next year (this is a big deal since Best explains there is a two-month wait for Toronto businesses to get on the list as one of Groupon's daily deals).
“I would encourage any small business owner to use Groupon,” Best explains. “You get to gauge how your marketing dollars are spent and they can create exposure for your business that you can't create on your own.”
