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Groupon exploded last year with 35 million registered users in over 350 international markets. They also just received more funding; valuing them at $7.8 Billion, trumping their $6 Billion offer from Google! Despite it’s success it has received quite a bit of flack from analysts due to the reports of the profit margins of their program being little to none (if not negative) as a business. But since when has participating in marketing pay? The TV networks and print publications aren’t giving out $100 bills with their ad space… Those critics are missing the big picture! Social Media, which Groupon definitely falls under (it leverages customer opinion and their sheer numbers afterall), is about building relationships.

Offering a huge discount to a large number of people is just the means to an end. A good participant in a Groupon would leverage the number of people coming into their location or purchasing their product by obtaining VALUABLE information from them. i.e. an email address – probably the most valuable piece of information you could get from a person. Every company has a return business ratio. If the company is tracking that number well enough and knows how many of those customers return because of their newsletters or email reach outs, they could properly design a Groupon campaign to offer their product to just the right amount of people to cover their losses through return business!

Just like all other social media, Groupon is a tool. Use it properly and you can make it a successful tool. It will help build your brand and leverage customer social interaction…