Why is the Groupon mascot a cat? Discuss amongst yourselves...

Some of you may remember me questioning Groupon in the past for their obvious consumer appeal, yet lack of significant benefit for business owners.  We’ll I’m here today to take some of that opinion back, thanks to a brilliant announcement by the company (still “one smart cookie” in my book!)

Groupon is launching “Personalized Deals” today in six cities (yay for Seattle!), with a strategy to target customers with additional daily deals tailored for their location and interests.  As you probably know, the model now is to promote one deal per day to each city, via social media, email and web promotion.  But often the deal of the day isn’t quite your cup of tea, leaving you sad and with money burning a hole in your pocket (okay, maybe not).

With the Personalized Deals, Groupon is looking to make a wider-ranging attempt to get you to purchase a deal – whether it’s the featured one for the area or one targeted for your demographics (sex, age, zip code). Again, this is great for the consumer. But my guess is that these more personalized deals should finally be more profitable to the business offering the deal, since it should deliver a more “targeted” buyer who has potential to be a repeat customer.  And THAT is the key to making a Groupon successful for businesses.

Businesses have a hard time profiting from the one-time, grab-a-good-deal Groupon purchasers, since the profit margin is so low for them. But if the business can upsell you or turn you into a repeat customer at full price, then Groupon will have been a smart marketing tool for them.

So, as Groupon instructs now: ” Login to Groupon and click “My Profile” to enter your preferences so we know enough to send you deals that match your tastes, and grant ourselves power of attorney…”  Okay, so maybe you don’t buy into that last suggestion, but this is a feature you should jump on now. Go!

I’d also love to hear what you think about this new approach – good, bad, indifferent?? Let’s hear it in the comments below…