Through this column, I periodically introduce you to socialmedia platforms that have recently stormed the shores of businessmarketing. Some have been a great fit for enhancing an independentagency's marketing and public relations efforts; others seem to bemore of a stretch. In either case, I believe there is a lot tolearn from the brain trust that goes into their creation. Thislatest concept is no different.

Related: Read Gilman's December column on s-commerce, “Was it good foryou?”

Depending on where you live and what your source of news is, youmay have heard a bit about Groupon, a social media platform that is basedon the concept of collective buying. It has been around for lessthan 3 years and just a couple of months ago, it was reported thatGoogle offered to buy it for $6 billion. Groupon CEO Andrew Mason turned them down.

How it works
Groupon's business model is pretty simple. Each morning the nearly20 million subscribers receive an e-mail promoting the “Daily Deal”for discounts on products and services from local businesses. Thatmeans that my deal is different in New Jersey than what you mightsee in Austin, Texas, or Peterborough, UK (Groupon has a globalfootprint).

Groupon is not merely a system for accessing discount coupons.For every “Groupon” sold, somebody had to pay money for it, whichmeans he will visit that business. In addition, the Daily Deal hasa minimum number of Groupons that need to be sold before “the dealis on.” There also is a countdown clock, which tells you twothings: first, how much time is left to buy the Groupon for thisparticular deal, and second, whether the deal is on yet. If theydon't reach the number, then all those that might have purchasedthe Groupons previously are refunded the cost back to their creditcards.

Groupon doesn't say what percentage of deals don't make themagic minimum, but they do claim 95 percent of their businesscustomers want to repeat having their product or service as a DailyDeal. As the Groupon site shows, as of this writing, more than 20million Groupons have been bought, resulting in a savings of morethan $850 million.

There's no financial commitment on the part of the businessthroughout the whole process. Groupon takes a small percentage ofevery Groupon sold and sends the rest to the business. Grouponprovides all of the marketing and sales support and, working withthe individual business, drafts all the copy used in the Daily Dealpromotions.

Because a minimum number of people must buyfor the offer to be valid, Groupon guarantees paying customers.“These people are not looking for the perfect deal. They're lookingfor the perfect excuse to try something new,” Mason said.

Despite this being a coupon-based service, Groupon subscribersare described as “hip, active singles who go out two or more timesa week.” They are college-educated users of social media and whilethe demographics slant slightly toward single females, it's notabout saving money but rather spending it with friends.

Subscribers share the featured offer with their social networkthrough Facebook, Twitter and other similar platforms, building aviral buzz around that particular business' products or services.The benefits of this method of marketing, as you know, can continuefor months following the initial hit.

Subscribers look at Groupon as a city guide, pointing them toall of the great stuff they may have never tried, or maybe neverheard about, right in their backyard. Each Daily Deal is showcasedin front of thousands of subscribers in each Groupon city(currently numbering more than 300 markets worldwide).

The difficulty from a business perspective is getting that “facetime” from Groupon's powers that be to be selected as a featuredoffer. With only a couple of offers per market per day (weekendsincluded) and thousands of local businesses wanting in, you don'thave to be a math genius to realize not everyone who wants it, getsit.

Affiliates program
Groupon has an affiliates program that enlists you and yourbusiness website to help promote the daily offers and allows theaffiliate to earn up to 15 percent based on sales volume for newuser purchases. Typically, businesses interested in this kind ofrelationship are those that either don't provide the usual kind ofproducts or services a Groupon business would; or want to convertto an affiliate to garner as much value from Groupon aspossible.

The way the program works is the affiliate embeds a dynamicwidget into its website. The content and graphics refresh daily andfor every visitor to the affiliate's site who clicks through theGroupon banner and buys a coupon within 30 days, the affiliate getsa commission of anywhere from 2 percent up to 15 percent, dependingon the volume.

So how might this work for agents?

I often have talked about independent agents leveraging thelocal business clients in partnering on joint marketing efforts(read my September2010 article on Foursquare). The obvious benefit in becoming aGroupon affiliate might be the value you could bring to yourclients. Through the program, you could promote products andservices of some of your commercial clients or more likely, coulddevelop a great introduction to prospective clients by positioningyour agency as already supporting their businesses.

The other obvious value is the potential commission, as well asthe value enhancement of your website as an information resource,which in turn can drive greater traffic to your online agencypresence.

The downside and a possible reason to seek an alternativepartnership arrangement is the fact that you can't dictate whatbusinesses are promoted through the Daily Deals that appear on yourwebsite. Turning this inside out, however, you might consider thevalue to your commercial clients if you were to just create a cityguide-type resource on your website. Offer your clients theopportunity to promote their businesses through you; perhaps youcould ask them to create a unique deal that only can be accessedthrough your website.

This partnership not only shows your commercial clients thevalue you bring and the strength of your brand within the localmarket; it also builds a great resource for your personal linesclients, especially those that might have recently moved into thearea. You and your social media presence could provide that“Welcome Wagon” type of insight to the neighborhood.

It's not either/or
As with all of these new and dynamic social media tools, don'tlimit your options by thinking only of using it or not. Thespecific parameters of any given platform may not fit your needs,but it doesn't mean the concept won't. Some pundits of this newworld believe that social media is only another marketing andcommunications channel; others believe it to be the silver bulletfor many businesses. I believe it is just the next step in anevolutionary process.

Social networking is no more or less important than the previoussteps we took or the steps we will take down the road. How weinteract within the business environment (see my column from lastmonth) depends as much on how we like to engage with people as itis on how our customers want to engage with us. But it doesn'tdiminish the need to understand the various steps you straddle asyou move forward; nor does it eliminate the need to strategize howyou will successfully navigate your way through a particularpassage.

The overarching message to get from this is that you shouldn'ttry to skip a step; your customers probably won't, and that canresult in your business getting out of sync with your clients,markets and partners. At the same time, don't feel that you mustexplore each and every nuance of social media because if you do,you'll move very slowly, taking only baby steps; there are just toomany options out there. That's when a solid strategy built aroundyour agency's brand and sales and service goals comes into play.Your strategic plan helps you to choreograph your forward movementso there are little or no missteps.

Is your agency's dance card full with opportunities? Or are youplaying the wallflower over in the corner alone?

Related: Read Gilman's December column on s-commerce, “Was it good foryou?”

September2010 article on Foursquare