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Springfield Businesses Try “Groupon” Advertising

The concept of a group deal has hit it big with online social coupons sites like Groupon. And many Springfield businesses are taking notice. KSMU’s Mike Donnelly has the details.

The economic recession that began in 2007 changed a lot for the consumer. Instead of spending impulsively and putting things on credit, people began to conserve their money almost more than ever before. Another thing they did was look for deals.

Enter the social coupon. Websites like Groupon, LivingSocial, and Woot have exploded on the business scene in the past couple of years, not only because they can provide great deals to consumers, but moreso because they appeal to local businesses. They provide a likely source of revenue, while at the same time attracting a steady stream of new customers.

Springfield was added as a Groupon-featured area in November, 2010, and since then, it’s made a profound impact on some area businesses.

Anne Kim, general manager of Finnegan’s Wake Pub said that the Groupon deal she took part in earlier this month caused a sharp increase in customer traffic.

“It was actually another full increase in business. I believe we got a lot of customers that that normally wouldn't come to our restaurant, people from [the] south side or out of town. So it's definitely been a positive impact on our business."

Sites like Groupon essentially operate by offering a deal to customers in a geographic area. There’s a minimum cap on the number of potential customers that must sign up for a deal that they are interested in. If the business reaches that minimum number, the deal is sent in an email to all subscribers in the area.

Although it may seem like a win-win situation for everyone, some say that there can be too much of a good thing. Dr. Sarah Smith, E-Marketing professor at Missouri State University, explains why.

“Maybe one of the risks with Groupon would be similar to a risk anytime you do a lot of sales promotion, and that would be that consumers sort of get trained to expect a deal.”

For the short term, sites like Groupon may be a standby for gaining revenue, but Smith says that social coupon websites may have to think differently for long term success.

“Right now it seems to be very popular. A lot of consumers are interested in it. A lot of businesses are interested in it, but going forward in the long term, they’re going to still have to think of ways to stay relevant to adapt as the environment changes.”

For KSMU News, I’m Mike Donnelly.