Ever since Groupon got crowned as the fastest-growing company in the history of the world, there have been hundreds and hundreds of copycat “deal of the day” websites cropping up. This “daily deal” craze seems to have no real signs of slowing.
In case you’re not familiar with Groupon (and their many competitors), they partner with small businesses to offer special discounts to the Groupon email newsletter subscribers. Then, they send an email out to their subscribers announcing the deal, and new customers flock to the business by the dozens and hundreds.
I know one business owner (a massage therapist here in San Francisco) who attracted 500 new customers from a single Groupon promotion.
However, as you may or may not know, there are several downsides to working with Groupon. First, you have to heavily discount the price of your services by 50% to 90%. Then, you have to split your revenue with Groupon, so you only keep 50% of the revenue. So, if your service is normally $100, you’d offer it for $50, and you’d really only receive $25.
Yikes.
But wait, it gets WORSE.
Since there are costs to fulfill orders, it’s not uncommon for businesses to be losing money on every new deal-seeking customer.
Now, of course, there are several strategies you can use to navigate a profitable promotion with Groupon by using up-sells and other creative marketing strategies, but running a profitable Groupon promotion is NOT the focus of this article.
Instead, what I’m suggesting today is that you copy Groupon’s methodology and model them in your small business for your OWN advantage.
Specifically, I’m recommending you build your OWN email list that you can send special offers to. That way, when you send out special promotions, you can discount as much or as little as you want to – and, best of all, you get to keep ALL the money generated from the promotion.
Sound good?
OK, let’s dive in…
Step 1. Get setup with an email software provider
If you don’t have one already, the very first thing you’ll need is an email software provider to manage the email database hosting, email sending, and list management process. There are many options including Constant Contact, Mail Chimp, iContact and many others. We use iContact and recommend you do too. iContact currently offers a 30-day free trial and pricing from $10/m for 500 subscribers. Good deal.
Step 2. Build your own email list.
You need to make it really easy for people to join your email list.
Groupon is a pro at this. The Groupon.com homepage is a great example of an opt-in page (also known as a “squeeze page” in the online marketing community). The only option on the Groupon.com homepage is to sign up for their email newsletter, so you can receive special deals and discounts. As a result, when people go to Groupon.com, they sign up, and Groupon has built massive email lists of people who are looking for deals.
Of course, it’s not practical (or sensible) for you to change your homepage to focus 100% on collecting email addresses to the exclusion of anything else. Nevertheless, building your email list is one of the smartest things you could possibly do as a small business owner.
So how should you go about building your email list?
There are tons of list-building strategies available to you, but the fastest and easiest way to generate more opt-ins from your website is by adding a lightbox to your website. When visitors land on your website, you can display an unobtrusive pop-up window with a sign-up form. This requires a tiny bit of technical know-how, but it’s MUCH easier than redesigning your website pages.
We use a lightbox on the MainStreetROI.com blog. (You may have already seen it a few moments ago).
When you land on the blog, you see this…
And then a few seconds later, a lightbox appears offering a free report.
Lightboxes are very quick and easy to install. iContact and other major email software providers include this technology as a standard feature. It takes a tiny bit of technical knowledge (you need to know how to edit your website’s HTML code), but any webmaster should be able to install a lightbox on your website in less than an hour.
As I said, there are several other ways to build your email list, and that could be the subject of an entire book. So we’ll have to leave it there for the sake of time.
Let’s keep moving forward and get to the good stuff. Now that you’re starting to build your list, it’s time to start sending emails – and making money.
Step 3. Send out a profitable email campaign.
If you want to make money with email list, you can’t just send out anything. People get a lot of emails, and you need to fight through the clutter in order to stand out. And then you need to motivate people to take action and respond to you.
Here are the 5 things you need to make your email marketing campaigns a profitable success…
Ingredient #1: A Good Subject Line
First, you need to get your subscribers’ attention, so they open the email. The best email subject lines use curiosity or a benefit-driven message to capture attention. Groupon has teams of writers whose sole jobs are to write clever email subject lines.
Ingredient #2: A Compelling Offer
What do you have to offer? For example, are you promoting a sale, introducing a new product or service? Whenever possible, try to provide so much value that your prospects will consider yours to be an “irresistible” offer.
Groupon and their competitors focus purely on discounting, but that’s not the only way to make a compelling offer… You can also create higher-end offers, such as limited-quantity, high-priced special events. That said, discounts definitely do work.
Ingredient #3: A Believable Story (or “Reason Why”)
It helps people respond to your campaign if you tell a story. At minimum, you need to give some background about the promotion.
Groupon’s story or reason for giving deals is that it’s their entire business model. In your case, if you’re running a small business, you’ll of course need to come up with a different story for your promotions.
Why are you making this offer? If you’re running a sale, why are you running a sale? If you’re introducing a new product or service, what’s the reason? The story or “reason why” doesn’t need to be overly complicated. For example, you could be running a sale during Thanksgiving to thank your customers for being loyal customers.
Ingredient #4. A Clear Call-to-Action
If you want lots of people to respond to your offer, you need to very clearly tell people exactly what you want them to do.
Groupon and the other daily deal sites make it very clear what you’re supposed to do if you’re going to take advantage of the offer. You need to be equally clear in your email promotions.
For example, if you want people to print out a coupon and bring it into your restaurant or store to take advantage of a special discount, then be sure to state that very clearly. Don’t leave anything to doubt. In fact, you’ll usually increase your response if you repeat your call-to-action in your email.
Ingredient #5. A Tight Deadline
This is the real genius of Groupon – the ticking clock.
We’re all procrastinators. Your customers and prospects need a good reason to act NOW. One of the best ways to create urgency is by having a deadline. This can be a time-based deadline, such as the end of the sale, or a quantity based deadline (limited-quantity available).
And if you want to get an extra boost from your promotions, send an extra email when the deadline is approaching to give people one last chance (e.g. Final Notice) to respond to the offer.
“The Money’s In the List”
Done right, email marketing can help you achieve a new level of control over your marketing. Once you’ve cultivated an email list of thousands of prospects and customers, you can send out special offers and promotions and generate sales on-demand. In my opinion, your list is the greatest asset you can possibly build.
It’s Never Too Early to Get Started…
As a small business owner, you might feel a little intimidated about getting started with email marketing, or think that it’s not going to make a big impact on your business – so why bother. Don’t make that mistake.
It’s never too early to start using email marketing because you don’t need a massive list to generate decent income. One client of mine generated more than $1,000 within 1 week from a list of only 47 people. Not bad!
And the results are cumulative. 6 months or 1 year from now, you’ll be kicking yourself if you still haven’t started building your email list.
So get started today!
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