Hi Steve,

Just wanted to run something by you.  There is an internet service called Groupon.com which of course is a play on the word “coupon”.

They run a promo on-line for a 24 hour period, which people pay Groupon for. Groupon then issues them a coupon to be redeemed with the merchant.  Most of the promos are product and restaurant oriented but they also do services.  So they approached me about running one for carpet cleaning.

This is the deal, Steve.  They will promote my carpet cleaning company by offering $125 worth of service for $50.  They will collect the monies and issue coupons to the purchasers.  They will then will split the $50 with me so that I would get paid upfront $25 for every one purchased.  The persons buying would get one year to use the coupon.

So if 200 people purchased I would get $5000 as a lump sum payment up front.  I can limit how many can be purchased.  Supposedly, a cleaner in San Diego ran a promo and got 198 people to purchase.

The demographics are good with 77% women shopping the site with a large percentage in upper income brackets. (I don’t have exact numbers at my finger tips at the moment.)

Interesting concept.  Would it be worth doing?

In-between in Miami

Hi In-between ,

Big Billy Yeadon and I are both skeptical.  Here are some of our concerns:

1. Product mix is more toward entertainment instead of in-home services.
2. 25.00 return for 125.00 in services is a substantial “discount”.  I realize that you are looking at the customer as a long-term investment but still …
3. Are you prepared for the possible growth?  Last time we talked you were basically an owner-operator that was on the “wrong side of 40”!  (No offense!)
4. Is this Groupon.com an ethical company?  I would insist on references from other carpet cleaners in other areas that have used them.  (You can also google the name and find them yourself. Or you can post your question on the internet discussion forums and see what other carpet cleaners have to say about the company.)
5. Can you do a short-run test with the option to come back down the road and do a full roll-out for a larger market area?  Speaking of market areas …
6. Can this company target specific geographical sectors?  That way you could just go after the enclaves where your most productive and profitable jobs are right now.  Either way, I would …
7. Be absolutely sure to review the contract before signing.  Especially if this is a long term program or a major investment you probably should have your attorney look it over before signing.

Let us know what you decide and how it works out, In-between.

Steve

P.S.  Even better, let’s invite our readers to chime in.  So if anyone has used Groupon.com (or any other company of this type) please share your experience right here.

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