On the heels of Groupon’s $700 million IPO, stock market analysts and strategists are taking a wait and see approach before they deem it a long-term business success. Wall Street and tech experts aren’t sure Groupon can sustain profitability within its current model. These concerns are valid: the daily deals giant has had a difficult time scaling costs, maximizing spend and driving growth. By building its brand around the one-time, sale-conscious consumer, Groupon has struggled to drive repeat revenues for businesses. Perhaps the time has come for Groupon to strategically position itself by way of performance marketing.
Groupon has successfully leveraged performance marketing on the advertising side drastically increasing subscribers and sales from 2009 to 2011. Now, they should consider utilizing it to reinforce their brand image and build or re-build relationships with their clients. Consumers love Groupon because they get great deals. Groupon needs to convince businesses that continuous revenues could be generated through improved targeting, localized search and media buying, deeper multi-channel engagement, better compliance and precise measurement.
It’s been almost a year since Groupon spurned Google’s $6 billion purchase offer. At the time, many experts understood and even praised Groupon’s decision. 11 months later, that hindsight is 20/20 thing is rearing its ugly head. But with a $700 million IPO, it’s clear Groupon will be around a while. In order for the online couponed to reassert its long-term growth strategy, it needs to demonstrate continuous improvement in sales and efficiency. Leveraging an integrated performance marketing program would certainly help.