Online subscription service Groupon helps stimulate local business

The company negotiates daily discounts with a variety of local businesses and services.

Andrea Schug

Business across the country has been stimulated thanks to the hundreds of thousands who have subscribed to Groupon to receive discounts for their products and services. Groupon, a company that offers a daily deal for the best things to eat, see and buy locally, has been growing steadily in Minneapolis since it got its start here in October 2009. The number of Groupon subscribers in Minneapolis reached nearly 105,000 Monday. Minneapolis was the 21st city to host partnerships between local businesses and Groupon. The Groupon daily coupons range from 50 to 90 percent off and are accepted by a variety of businesses. The businesses featured for Minneapolis Groupons include restaurants, spa services, dental care, grocery delivery and exercise classes. âÄúMinneapolis has a lot of small, local businesses, the kind of merchants weâÄôre looking to support,âÄù Julie Mosser, Groupon public relations manager, said. This past winter, Groupon formed a partnership with Pagoda, an Asian restaurant located on Fourth Street Southeast in Dinkytown. Shortly after agreeing to join GrouponâÄôs string of businesses, Pagoda was featured as GrouponâÄôs daily deal. âÄúWe already have good specials here for regulars and students,âÄù said Justin Lin, co-owner of Pagoda. âÄúIf they can get more discounts, everyone wants to do that.âÄù Justin Burnett, a cultural studies and comparative literature senior, said he signed up for Groupon last fall after hearing about it from a co-worker. âÄúI saw one of her e-mails with a dayâÄôs deal to a place that I liked,âÄù Burnett said. âÄúThat one good deal was really all it took to get me interested.âÄù When consumers subscribe to Groupon, they receive an e-mail each day notifying them about the deal of the day. If customers decide they want to purchase the Groupon for the day, they can click âÄúBuyâÄù in the e-mail, which then takes them to a link where they can print the coupon. âÄúWeâÄôre providing a service to consumers by providing them great discounts to the best things in their city, encouraging them to explore the city and try something theyâÄôve never tried before,âÄù Mosser said. Burnett, who buys up to four Groupons each week, said he mostly uses the Groupons when they are restaurant coupons or deals with grocery delivery, but all of the coupons spark his interest. âÄúNo matter what âĦ itâÄôs tempting,âÄù Burnett said. âÄúItâÄôs like when you go into a good store sale and think to yourself, âÄòI donâÄôt need this stuff, but itâÄôs half off.âÄô âÄù In order to ensure that profit is made from the daily deals, Groupon and the businesses negotiate a minimum number of customers needed to make the deal valid. If the minimum number of customers is reached, each subscriber who purchased the daily deal is billed, and Groupon and the business split the money made. If the minimum number is not reached, the consumers are notified that they will not receive a Groupon for that deal and that they will not be charged. âÄúItâÄôs called no-risk marketing,âÄù Mosser said. âÄúThereâÄôs no cost up front, we just highlight their business and see what kind of response we get.âÄù When looking for businesses to feature, Mosser said Groupon not only takes into account the demand for the product but also looks at the businessâÄô history and success. âÄúWeâÄôre not looking for someone who is on the verge of going out of business,âÄù Mosser said. âÄúWe want businesses that we would be proud to introduce customers to and places that we would want to go.âÄù