It took Groupon just 16 months to go from $0 to $1B.
How did they manage to achieve this?
In 2007, founder Andrew Mason launched his startup “The Point” – a web platform that utilised social media to help people accomplish any goal together.
The outcome is average progress.
One set of customers decided in November 2008 that they would band together to try and negotiate some sort of bulk pricing.
Result: \sThe rest of the users joined this initiative with much bigger enthusiasm compared to any other goal.
Eric Lefkofsky, a co-founder of The point, offered to test an idea for a company “Groupon” that would entirely focus on group discounts.
And they invested $0 to test this idea:
On the first floor, in the same building they were working, there was a Pizza restaurant. Their proposal went something like this: + Let’s do a two-for-one pizza deal. + You pay us nothing up front. + We just sell your discount coupons and make money off that. + You get your clients for free.
They reached a consensus.
All the stores in this complex and the surrounding area were given these discounts.
The end result was that the pizza shop gained new customers, and the company’s founders were able to generate revenue without having to write any code or put any money into the venture.
They canvassed the neighbourhood in search of businesses willing to give them a group discount in exchange for a handful of new customers.
As a result, nearly all service providers coveted free publicity in exchange for new clientele.
They set up a free WordPress blog to post deals on instead of spending money and time developing a web platform around the Groupon idea.
The first 500 customers are the end result.
Groupon focused on offers that were inherently social: cafes, restaurants or movies.
As a direct result, people started talking about the website more frequently.
Later on, they ramped up the emphasis on social media by providing a plethora of cool features (which you can put to good use for your business):
Deals oftentimes fail because not enough people sign up for them. You can see a countdown that motivates you to invite your friends to join this deal as quickly as possible.
After you buy a coupon, the platform offers to share it on social media.
Only when you go to the movies, cafes, etc. with friends will you be able to see the deals that are even more valuable. So, you want to help get the word out.
Help a friend make a purchase and you’ll both receive $10 as part of the referral programme.
Their customers are encouraged to make repeat purchases by receiving daily emails containing new and exciting discounts.
A friend’s coupon is on sale, and you can buy one for them. In exchange for your friend’s help, they will be given a free offer.
Short and humorous “Groupon Guides to [insert weird thing here]” are regularly posted on their site. Each one can be used to promote the Groupon website and offer page and increase traffic to those locations.