Group buying deal revisited: Was it successful?

With any promotion, especially a new one, you always have to wait to find out whether it was successful or not. Despite the fact that with group buying site promotions you pay per voucher sold, and despite the fact that you receive payment from the advertiser (Teambuy in this case), there is still an enormous cost and risk associated with this type of promotion.

Finding out whether or not the promotion was truly successful or not may take months but it is important to track its effectiveness afterwards, and not just for  a few months, but for years (take look at a cohort analysis if you haven’t already before). For this scenario we are only a month-and-a-half in and we a are new company, which makes it difficult to compare and really measure our success so far but this doesn’t mean we can’t start analyzing it. Here are a few things that we’ve considered already:

  • Have our revenues increased?
  • Have our revenues less discounts increased?
  • Do we have repeat customers?
  • Are we covering increased costs?

Our answers for the first three are all ‘yes,’ but our costs may take more time to solve. We’ve smashed our record for revenues even with discounts and we have repeat customers. As many as we would like? No, but it may be too early to tell still.

When we dig deeper we realize that previous customers did not increase spending at all. Almost, all of our increased revenues came from new Teambuy customers putting more emphasis on a successful campaign thus far.

Does the campaign cover its cost? Have we increased our customer base? Have we received a sufficient amount of repeat customers? Has this been profitable?

Until our vouchers expire in December these are all questions we will not be able to fully answer but analyzing the deal before it ends is just as important as analyzing it afterwards.

Here is some extra reading if you’re hungry for more ways to analyze group deal success:


Group buying sites actually work?!?! Who would have thought!

I just finished my second group buying promotion with We had our first with, but that was a total flop so I wouldn’t even count it (only 3 vouchers sold). This latest promotion so far has been a success. We were hoping to sell 50 vouchers and we ended up selling 75. We didn’t sell so many that we find ourselves drowning in customer requests thereby limiting the quality of our service, and we didn’t sell too few making the process worthwhile.

Great! So how did this become successful in the first place? Why did we choose Teambuy and why did it work where the other one flopped?

It is extremely important, as with everything, to shop around when it comes to group buying sites. Although, they all do the same thing, they do it in different ways and some of them are less trustworthy than others. The most important part of shopping around is getting a Merchant Agreement in your hands (or on your screen) and never agree to anything until you read it 5 times over. I’m serious! At least 5 times! Many of these websites assume that the merchant will not read the agreement thoroughly, so they insert all sorts of clauses that not only give the group buying site more legal weight, but could also seriously harm your business.

Here are a couple of examples that I believe are the most dangerous clauses:

a. From the Effective Date until 90 days after the Offer Period, the Merchant agrees it will not make, directly or indirectly through third parties, any other online offers relating to the products or services that are the subject of or associated with the voucher that provide a greater discount than provided in the vouchers.

b. The advertiser agrees to be featured on Group Buying Site at least 4 times per calender year solely at Group Buying Site’s discretion. Group Buying Site also reserves the right to set and structure the deal according to deal market valuations and will determine the structure price and services for the advertisement.

This first clause really limits your ability to market your company. They are just trying to protect their own deals but 90 days is way too long. The deal site for the second clause stated that they would absolutely take it out of the agreement or change the wording to both of our discretion’s. If you ask me this is too much, they are taking advertising control away from your own business!

When looking to take on one of these types of promotions my advice would be to take your time, talk to lots of group buying sites, read through their agreements, chat with their sales people (they might even call you up first), remember to always bargain, and never be pressured into doing something that could potentially harm your business. After searching long and hard I feel that I found the right site in Teambuy. They advertised our business with the right language, they answered customers questions diligently and accurately, their merchant agreement language was by far the least intrusive (in fact, not intrusive at all), and they were extremely patient with my questions the entire way through (even when I asked for the agreement to be changed four times). Probably the major reason the other one flopped was likely due to it targeting Mississauga (this one targeted Toronto) and maybe Teambuy’s customer reach.

Now the questions that remain are: What kind of customers am I getting? Are they just here for a quick deal or are they really interested in our service?

Now comes the really hard part in keeping these customers coming back without a big deal.