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7 Pros & Cons Using Groupon to Build Your Wine Club Membership

Posted by Mariana Vera on Oct 11, 2018 8:30:00 AM

7-pros-and-cons-using-groupon-to-build-your-wine-club-membership

Promoting your wine club subscription can be tough. It may only interest those who know they are passionate about wine tasting, and the price of becoming a new member can be a leading factor as to why your business may not be growing as much as you hoped it would.

In seeking new members, it is necessary to increase your wine club exposure. The challenge is, it will take some convincing when trying to bring in people who don't know if their love for wine is worth the cost. So how do you force them to get their feet wet?

Many wineries decide to seek marketing assistance from coupon websites like Groupon. Running a special offer that users can access through Groupon will no doubt bring new members to your doorstep, but there is no guarantee they will stay for long.

Your winery should be aware that Groupon offers may not bring automatic success. There are risks that come along.

Here are the reasons why your winery should and should not consider a Groupon offer.


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PROS

Reaching a New Clientele

A special offer on Groupon will gain traction from a wider audience - Groupon users. Statistics show in 2018, there were 49.3 million active Groupon users worldwide (Expanded Dramblings). I'm sure that number is a lot larger than the number of subscribers your wine club has.

People in general are more open to trying something new when they know they are offered a special deal. Majority of customers find it hard to commit a large amount of money on a new experience, but a survey showed that 51 percent out of 10,009 online shoppers agreed that their purchases were mainly influenced by some type of discount or offer (Huffington Post).

A Groupon offer can be just the push new customers need to becoming the newest member of your wine club.

 

Immediate Flow Increase

A Business Insider survey showed that over 60 percent of businesses who created a Groupon offer considered it a success.

This is attributed to the immediate increase of business flow a Groupon offer will create due to the time limit your offer will hold (Social Media Today). For example, if you decide users only have three days to take advantage of your offer, you will have an increase amount of business sales within those three days because of the expiration time of your offer.

In general, an expiration date forces a sense of urgency on customers (Inc.) Urgency will generate an increased chance that customers will make impulse buys, increasing sales nonetheless.

 

Out With The Old

Your winery is up-to-date with seasonal trends, but your lack of sales are dragging you down. Winter is around the corner, but your winery is still trying to get rid of all the Rosé that was supposed to sell out by the end of summer.

A great way businesses sell older inventory is will a Groupon offer, or in this case an item that will no longer be trending because of the season.

Customers will still buy an unpopular item because of its discounted rate (Inc.).

 

CONS

Lack of Loyalty

Your new customers only came for the offer. Since you bribed new customers with a discounted deal, the chances that they will keep coming back while paying full price is very unlikely.

According to Inc., a study showed that only 19 percent of the new customers your business gained from a Groupon offer will stay loyal to your business.

At the end of the day, your winery will have to decide if it's worth the money you are losing to Groupon - because that's right, it costs money to seek assistance from Groupon.

 

It's Going to Cost You

Something that businesses overlook is the amount of money Groupon banks on revenue. Ultimately, Groupon keeps 50 percent of the money earned from your offer (The Balance Small Business). 

So, if your winery decides to run a discounted offer for new customers to subscribe to your wine club for only 20 dollars for their first month, when it is normally 35 dollars, that's already a loss of 15 dollars.

Well, your winery is only going to keep 10 dollars from the offer. That's a total loss of 25 dollars for your business to possibly gain new members, keeping in mind that only about 19 percent of those new members will become repeat members.

 

You Have Competition

Other wineries are aware of using Groupon as a strategy to boost wine club subscribers.

This means you have competition. While Groupon users are on the hunt for a good wine club subscription deal, they are looking for the best deal they can get.

Although your offer includes new members a chance to subscribe for a month at 20 dollars, your competitor has an offer for 10 dollars for a member's first month. That's half the price of your offer.

Which offer do you think Groupon users will be attracted to more?

Also, Groupon is also not alone. Social media platforms like Facebook, Instagram, and Twitter all offer opportunities to advertise at a lower cost and they all have larger user numbers than Groupon has (Social Media Today).

For example, the price for an ad on Facebook depends on how long you wish to run your advertisement for and about $0.27 cost per click. So it is possible for your business to spend as little as $1.00 to advertise on Facebook (Top Draw). 

 

How To Decide?

Knowing what your winery needs is the best way to decide if Groupon is the answer to its problems. Having a Groupon offer every once in a while would be beneficial, like a trial and error tests to see if the traction it brings is worth the money. 

Or just running an offer solely on using it to move seasonal inventory along.

Either way, you can trust that it will bring an immediate increase of business flow during the time the offer run, and is a great way to get new customers to be part of your wine club at least once. 


Stop wasting money!

Learn 10 things that can be cut from your restaurant marketing!

10 things to cut from your restaurant marketing

Topics: Wine Marketing


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