Groupon business coupons: social media buying comes to Anchorage.

• Author: Sergeant, Deborah Jeanne
• Position: MARKETING

Social media buying programs have changed how people spend. Groupon.com has more than 15 million unique visitors per month since its launch in 2008, and now there are numerous similar companies online offering the "half-off" deals it made popular. Social buying programs are a great way of increasing foot traffic," said Michael "Buzz" Bizinski, owner of Buzzbizz Studios in Anchorage.

THE DEAL

Here's how it works: Social buying programs alert members to a local, daily deal through email, Twitter or Facebook. The limited-time deal will be "on" if a minimum number sells, and members are encouraged to tell friends through social media.

When enough deals sell, members' credit cards are charged and they are sent a link to their printable coupon. If too few commit, the deal is "off" and no one is charged.

"A business can increase traffic during their slowest time," Bizinski said. "People have saved their businesses like that. It creates opportunity for creating return traffic."

Alaska Computer Support offered its second Groupon deal a few months ago--a computer diagnostic, cleaning and performance upgrade at $69 instead of the usual $239.99. Owner Michael Wheeler says he only sold two Groupons when he tried a 50 percent-off deal for his first Groupon, so he made the second deal irresistible and sold all 20 coupons. Sticking with a small maximum number of coupons helped ensure demand would not overwhelm the computer firm.

C.J. von Imhof, who co-owns Acai Alaska in Anchorage, anticipated an eager response to their Groupon offer of $6 for $12 worth of products last November. He stocked supplies in advance and had extra staff ready, wise moves since Acai Alaska sold out their 600 coupons in two days and customers began redeeming right away.

Acai Alaska had a few glitches, such as staff not having time to correctly enter the coupon codes into the computer. The next time Acai Alaska tried Groupon months later, they used an iPhone to read and instantly redeem coupons.

Social-media buying programs usually require a 50 percent-or-more discount and divide that amount with the vendor, creating a thin- or no-profit margin for some businesses.

"Social buying programs are better suited for those who have a consumable rather than a long-term tangible product," Bizinski says, "unless there's a service contract or a repeatable service."

TARGET NEW CUSTOMERS

Businesses selling an experience can increase exposure without incurring much overhead or touching the price...