Lately, it is hard to ignore the buzz surrounding location-based online tools. Groupon, the localized daily-deals site, in particular has headlined recent news following its rejection of Google’s $6 billion offer. Many were (and maybe still are) shocked at the company’s leap to success. Its estimated net worth soared from $1 billion in April of 2010 to over $6 billion in November, making it the fastest growing company in history . But what’s behind such phenomenal growth?
Groupon’s collective buying business model, which capitalizes on location-based Web technology, has forever altered the way local businesses advertise online. With Groupon, companies create and offer exclusive discounts to regional consumers through Groupon’s distribution sites. Once an ad is created, Groupon emails the deal-of-the-day to subscribers in that city and advertises the discount through various social media channels such as Facebook and Twitter. A deal is only locked in if the minimum number of people sign up. If that happens, customers receive their coupons the next day and businesses are sent a check for the coupons sold (less Groupon’s fee). The result? Businesses gain mass exposure to local audiences through the company’s network – over 23 million US subscribers alone. Even better, they’ve lined up new customers who are already invested in the company – all at no out of pocket cost. Talk about a win-win way to reach consumers in your area!
Great news for SMBs
While Groupon is a valuable tool for businesses to tap into, it also highlights the growing trend towards location related 2.0 technologies. Many predict that these powerful tools will soon dominate the Web. By bringing online advertising and social media back to the immediate, real world location, SMBs have more access to tools and technology that reaches a key regional audience. The potential these tools have to better reach consumers and interested parties is expansive and will continue to grow in popularity and success. And those SMBs that leverage this new technology are likely to see huge rewards. Is your business ready to get on board?
Stats from Mashable.