Most Small Businesses 'Hate' Groupon: Survey Says

Seventy percent of small-business owners hate Groupon, according to a new survey by email and social media marketer iContact. But while Groupon was named "least popular," it had a lot of company: 25 percent of small-business owners hate social media in general.

Most popular was Facebook, loved by 76 percent. Somewhere in the middle, LinkedIn got accolades from 63 percent of the business owners, with professional services businesses and those with 50 or fewer employees being its biggest fans.

Respondents had a love-hate relationship with Twitter -- 54 percent love it but 46 percent hate it. Interestingly, the smallest businesses (those with 25 employees or less) hate Twitter the most, while big corporations (over $100 million in revenues) loved it.

Small-Business Votes Up for Grabs in 2012

Conventional wisdom has it that an overwhelming majority of small-business owners support the Republican party, both with their votes and their donations. But a new survey from Bizo and Vizu (both provide online marketing services to businesses) indicates that is no longer the case -- if it ever really was. The companies measured the general business audience, as well as small-business executives, and found that entrepreneurs were 27 percent more likely than big-business execs to donate to political causes.

Yes, more small-business folks affiliate with the Republicans (36 percent) than with the Democrats (24 percent), but the difference is not as large as most people imagine. Given entrepreneurs' independent nature, perhaps it's not surprising that most small-business execs (40 percent) claim to have no party affiliation (compared to 31 percent of their big-business counterparts). When it comes to big businesses, nearly the same number say they are Republicans (35 percent), as are Democrats (34 percent).

Check's in the Mail?

The tough economy is having an effect on small businesses' receivables. In a recent Rocket Lawyer survey that asked small-business owners about debt, 33 percent admitted that at least 25 percent of their customers are more than 90 days late on payments. What's worse is 25 percent of the businesses report they've had trouble collecting payments, and of those, nearly half (49 percent) wrote off some bad debt this year.

If you're one of these entrepreneurs, you need to get serious about collections. Just 34 percent of companies in the survey called customers whose payments were late, although this is one of the most effective methods for getting late payers to cough it up. Just slightly more than half (53 percent) of businesses were using contracts to protect their interests, with the remainder relying on a "paper trail," verbal agreement or "other." Really -- you think that's going to hold up in small claims court?

Comments

[seajewel]

10:18 PM on 11/27/2011

I like Groupon as a consumer but only one of my companies might work with using the Groupon model to advertise because I feel it caters to fun & trendier businesses, and that's not really the way I want these particular companies to be perceived.

[krisgajj]

03:09 AM on 11/27/2011

There are so many business web sites such as http://www.bizworldusa.com http://www.bizworldcanada.com http://www.mblsalliance.com http://www.mblsworld.com http://www.blsalliance.com http://www.blsworld.com etc are offering a FREE coupons, where the buyers are saving thousands of dollars when ever they buy.

[Savage Saint Roger]

05:12 AM on 11/26/2011

I'm no fan of groupon. It was intrusive and offered nothing but restaurant and gym coupons. Big deal. Turn me onto 6 months of toilet paper and then we'll talk!

[handsout]

10:44 PM on 11/25/2011

Groupon will be GONE in a few years and only those who got in and out early on the stock will have made money. Their business model makes no sense to most small business owners who have tried it. You get bargain hunters who drink water, never come back and move on to the next deal.
Great for consumers, but bad for small business owners.

[Signpostsales]

10:21 AM on 11/23/2011

The trouble small business owners have with Groupon, they take 50% of the generated revenue, and CPA (cost per ad). Business owner is not allowed to limit the number of customers that are allowed to purchase the deal. And also what days the offer is valid, it would make sense to limit those days to when the merchant has little traffic.

A new alternative is a new Google Venture and Spark Capital company called Signpost. Based in New York, they are expanding into the first fifty (50) major US cities. Designed to be more geared to the smaller business owner, it allows when the offer can be run,the number of offers available and the days available to redeem the coupon.

Signpost only charges the business owner a flat monthly fee of $99.00, the business owner keeps 100% of the revenue generated from the sale of the coupon, less a 15% service fee in some instances, where a marketing partner outside of the Signpost network has created the sale.

The average Signpost offer gets over 100,000 impressions from local consumers. The majority of those impressions come from 1,200 marketing partners who promote Signpost campaigns to their audience.

To receive more information contact Karl Erikson, Signpost Executive Scout, [e-mail]. Or visit us on the web at www.signpost.com

[Tyler Bealmear]

02:38 AM on 11/23/2011

Groupon does a poor job of returning customers but the vast majority are simply going to follow on to the next deal. There is no incentive for a customer to return, for example a buy six get one free at a sub shop. Not to mention Groupons' fees and expenses are outrageous.

[BrowsersBookstore]

01:11 AM on 11/23/2011

Very surprising article. Here's my Groupon experience (I own two small used bookstores):
1. Made a small number of regular customers very happy (they were existing Groupon shoppers)
2. Got in a lot of people who had been in before, but not for a long time.
3. Got in a lot of people who had NEVER been in.

Sure, I'm taking a 75% loss on this one (small) purchase. (We did a $20 Groupon, for which we received $5). But here's the point--other than the few regulars, all of those $5 were for people who would otherwise not have been in. And I've already seen some of them come back! So, I paid $15 to get someone in the door. Might seem like a lot, but I've also spent hundreds on advertising campaigns which brought NO ONE through the door. And the deal with our bookstore is that once you come in, you've got a good chance of falling in love with it. Anyway, I won't be doing it all the time, but we did get a much better response from this than from any other single advertising campaign--and no out-of-pocket expense.

Social media works, but only to a certain segment of the population. Although for our shop it's not the most effective advertising campaign, it costs me about 2 minutes every week--not a big investment to get that TOMA (top of mind awareness) going to the people who use Facebook or Twitter or LinkedIn.

[seajewel]

10:20 PM on 11/27/2011

Sounds nice, wish I had picked something less serious and more creative to sell. :-)

[BrandedBusiness]

06:58 PM on 11/22/2011

This post presents some interesting points as far as small business is concerned. What it really comes down to is; who is your target market? As technology and business evolve it is only natural that it will work for some and not for others. Traditional practices might be the best for some industries, because that continues to be the method that you can most effectively communicate to your audience. As we look forward some of those avenues may become obsolete and therefore a complete waste of marketing dollars. As with any investment, diversification is key. Keeping on top of trends is important but only if those trends are yielding a decent ROI.

www.brandedbusinessapps.com

[David Vynerib]

09:53 AM on 11/22/2011

This market is brand new and being developed as we speak. Most likely the market will move to the "Groupon's" earning a lesser percentage of the "coupon". It's not really market rate for the "Groupon" to earn 50%. Let's look at an example: You are a hair salon and sell your service at 50% and then only collect 50% of that meaning you are only taking in 25% of what you would normally charge and that is not sustainable.

[euromarkusx]

09:28 AM on 11/22/2011

Groupon and Twitter are USELESS for small business

[SeanStewart300]

05:01 PM on 11/21/2011

There is no reason for small businesses to hate Groupon, and generally social Media,just because of the competition that it renders!!!

it will be better if they themselves will also engage on internet marketing for them to see the opportunities there!

Think it through!

Visit Crumblrr

[Greg Albright]

06:42 PM on 11/21/2011

My small business workplace just abandoned all social media and we just cross promote our website now because social media simply does not work, and it is a huge cost and time sink. It would be best if everyone just ignored social media everything and focus on the basics.

Have a website so you show up when people search you. Still the vast majority of our customers find our website from our product labels.

[NevaforLeadership]

10:22 AM on 11/22/2011

It depends on whether you want people who are searching for your product to find you, or whether you want only people who know your business name to find you.

Links result in successful SEO, and links involve social media: web pages, blogs, chatter and shares, LinkedIn for sure and its groups, maybe Facebook (depending on the product) and Twitter.

One has to be aware of the limitations and dangers of social media: being whitewashed away with millions of others, automated joiners with various ugly agendas, and spam.

[Bruce Joseph]

01:29 AM on 11/22/2011

I heard from a local small business owner that Groupon's fees are very high, and that several local restaurants had gone out of business because of Groupon promotions.

I was told that many who go in for 2 for 1 dining offers don't order drinks or appetizers to help offset the discount. It's not all roses for those offering Groupons.

To be fair, I am basing this on second hand information.

[NevaforLeadership]

10:27 AM on 11/22/2011

Using Groupon as a lost leader could be dangerous. If a business has to spend more to serve the Groupon crowd than the crowd will fork out, then it could be 'bye 'bye business. On the other hand if one has to fill up spaces in, say, an aerobics studio, it's immediate cash in the door; cash that could keep the business alive through the start-up phase.

[handsout]

10:45 PM on 11/25/2011

I can give first hand info that you are 100% correct.

[fozzi58]

04:25 PM on 11/21/2011

Are you kidding me? You think I am going to lose time and money to go after someone that owes me $900? Even with a professional signed contract its impossible to get people who are delinquent to pay. They would rather just have the judgement levied against them.

And the Repugs lost my vote a long time ago. When they start to realize that bubble up economics works and not trickle down, maybe they will win me back. But no amount of tax breaks will help me if my customer base doesn't have money to spend...

[joelp77440]

03:42 PM on 11/21/2011

Conventional wisdom has it that an overwhelming majority of small-business owners support the Republican party, both with their votes and their donations. - Who says that? Big business yes, small, it can go either way. Remember, most small business owners are middle class,the rich feel that the middle class's job is to be of servitude to them and the poor should fall off the face of the earth. Really, I went to a Ivy league school for post graduate work. The really do feel that way, at least 80%.

[NevaforLeadership]

10:35 AM on 11/22/2011

You obviously don't own a small business, because one rule that small-business owners very quickly learn is that money takes their businesses to the next level. That means understanding the value of the rich, their contacts, and their willingness to take a risk and invest in some middle-class business.

[craftycrow]

03:29 PM on 11/21/2011

Twitter's been the best thing for my small business. Gets me a lot of traffic to my site.