Young New Yorkers live by their phones. You need to find a fabulous nearby restaurant, Instagram the street performer on 39th and 7th, and now introducing the mobile coupon. It is no secret that rent is not cheap in New York and people are finding creative ways to save money, but they’re not getting out their scissors and newspaper anymore.

Sites such as Groupon are revolutionizing the way people eat, entertain, and buy everyday items by providing discounts up to 90% redeemable by mobile devices upon arrival, but is Groupon the right thing for your business?

Pros:

You’re getting the consumer in the door. Somehow a Saturday cupcake baking class in the East Village makes the 30 minutes subway ride worthwhile when you’re offering 50% off and an additional dozen cupcakes for free on the side. You’re making the consumer feel special and smarter than the other ‘regular people.’ You’re doing exactly what brands aim to do: build a relationship and loyalty with the customer.

So what if they never come back again? Their facebook or Instagram check-in complete with pictures of their experience at your business is the most organic way of word of mouth marketing. How do I know? Because I took a cupcake baking class at Butter Lane Cupcakes in the East Village, pictures to prove it, and have recommended it to numerous locals and visitors in the city.

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Cons:

Groupon doesn’t promise brand loyalty. In the age of comparison online shopping and deal hunting, the nature of the website is to enable the consumer with choices. These choices serve as a double edged swords to businesses in the 335 cities Groupon currently serves in that the next deal is just a click away. This doesn’t mean it is not worth being part of the consideration set; it just means you have to create a worthwhile deal supported with superior service.

Criticizers of Groupon insist that there is a low conversion rate to loyal customers, but it depends on your industry. The woman in need of a repairman cannot wait until there is a deal on Groupon to return to using her refrigerator. However, when an event calls for cupcakes, I return to Butter Lane not only for the confidence in the product, but for the feeling of nostalgia.

The answer to all marketing qualms is not Groupon alone, but the key is integrating it into a working marketing campaign. Requiring Groupon codes redeemable only when checked in on Facebook, combining the offers with signing up for mobile alerts, or targeting Groupons to segment-specific Klout influencers extends the deal farther than the actual service being provided. There are endless possibilities to be explored, and until the perfect marketing mix is found, I’ll keep mixing cupcakes.

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