While it doesn’t have to be an either/or argument between adopting a local currency program and using Groupon, or other savings site, there are a number of reasons why a currency or gift certificate program brings in more of the business merchants want.
More Money for Merchants
One of the complaints you hear over and over again on sites like Groupon is that businesses take a hit. They offer their service, or product, at a deeply discounted rate and then the site takes its commission. You hope to sell more for less. If the customers return one day to pay full price, it’s worth it. If not, you hope your increased number of sales will cover the discount. But there’s a better way to do this.
When a merchant joins a local currency program, they don’t have to alter the prices of their goods or services just to gain traction. This means more money in their pockets.
Shorter Payouts
There can sometimes be a wait for payments from a savings site. It’s not uncommon to hear businesses have waited for months to get paid. With a local currency program businesses get paid every month directly from their local chamber or administrator of the program.
The Problems with Discounting
Groupon brings merchants a number of customers, maybe even more than they can schedule, but if you earn a reputation as a business that runs these deep discounts, many thrifty customers will simply wait until you run another discount to use your business. With a local currency program merchants needn’t discount their services and they can enjoy the publicity that comes from membership of the program, including being a part of a participating merchant list and exposure on the chamber’s website.
The Groupon Flood
When the merchant coupon goes live, you may be buried with a number of requests to schedule service. If you have a problem keeping up, this will reflect poorly on your business.
As part of a local currency program, your business remains steady and manageable and your customer base is not conditioned to wait for bottom-of-the-barrel pricing.
Groupon can be an effective way to get the word out about your business, but the price you pay for exposure erodes into your profit margin. With a local currency program you can expect timely payouts and checks cut for what your products or services are worth.
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