The Pros & Cons of Social Media Couponing

Social Media coupons are growing rapidly.  Who gets daily updates from Groupon, LivingSocial, or other more localized consumer daily deal website?  Recently Whole Foods offered a social media coupon on LivingSocial that sold 115,000 per hour during its peak time.  There are obvious benefits for LivingSocial, but the benefits of social media couponing are less clear for Whole Foods.  The media attention and word-of-mouth marketing is tremendous, but the monetary increase is more questionable.  The partnership suggests that Whole Foods saw potential to not only reach new customers but convert them.  But what about for a small business?  What are the benefits of social media couponing and what should you expect?

In a later post we’ll discuss how social media coupons works but before that, let’s look at the pros and cons so you can decide if it’s right for you.

Pros:
-Increase in web traffic for your products/services
-Word-of-mouth advertising and awareness of your company
-Reach new customers
-Upsurge in phone calls (be prepared)
-Opportunity to collect contact information for future marketing use
-Potential in sales increase
-Immediate buzz without many man-hours

Cons:
-Increased time and man-hours answering questions via phone, email and social media sites
-Less net income for the short term
-Need for responsive & immediate customer service
-Unless you are tracking each coupon, inability to track if someone has converted to a loyal long term customer
-If a part of the deal isn’t thoroughly thought out and communicated to employees there’s a potential for many unhappy customers, counter productive to word-of-mouth marketing
-You don’t get your money from the corporate coupon site right away

Are you considering using social media coupons for your small business?