By Zach Bulygo at KISSmetrics:
228% – that’s how much Groupon grew their revenue
in one year.
As one of the fastest growing companies around, Groupon employed many
growth hacks that helped lead to massive growth. In this article we’ll
examine some of them and how you can apply them to your own online
business.
As you’ll see later in this post, Groupon is based of
turning subscribers into marketers by giving them control to spread the
Groupon product.
1. Sharing is in Groupon’s DNA
You just
found a great deal on Groupon. It’s one that you can’t pass up. The only
problem that jumps in your way is that not enough people have signed up
for the deal – and the deal expires in 2 hours.
You may see something like this:

Your
motive is to spread the word, not just about the deal, but also about
Groupon. Telling your friends, family, followers and whoever else you
can about the deal and encourage them to buy. Those uninitiated with
Groupon will become introduced to it through the deal.
Takeaway:
Have
you built your own Groupon style promotion? If not, try running a sale
on a certain item. Or try offering big discounts to your current
customers only if they sign up X amount of people within Y amount of
time.
2. Tell Your Friends After You Bought a Groupon
After
the user makes a purchase for a Groupon, they can share it on social
media. This spreads the offer and the Groupon product to their friends
and/or followers.
Takeaway:
The
option to share a purchase on social media is nothing new, but it can
be quite popular. Leave the option open for a customer to share their
recent purchase with the people they know. Chances are if they see the
Tweet or Like buttons there they will click it. They probably won’t
think about going to Twitter or Facebook to post about their purchase if
no buttons are there.
3. Groupon’s for Multiple People
A
movie ticket for one may be a nice deal, but what about for 2-3 people?
These Groupon’s for multiple people help spread the advertising of
Groupon.
Takeaway:
Whatever your business
does, it may be beneficial to add a package deal. If you run a SaaS
company that sells project management software, you should try a ‘Buy
one, get one for a friend deal’. Similar to referrals, this would have a
customer buy your software, getting a discount for them, and then
giving the software to another person who has never used your product
before. The individual that got the referral then gets a month or two
free trials. This spreads your product and increases your viral
coefficient.
4. Daily Emails
It
may be overlooked, but the fact that Groupon sends daily emails can be
attributed to their surge in growth. Less frequent, more frequent, or no
emails at all (requiring users to go to the Groupon page themselves),
would negatively impact their growth. Emailing too often will lead users
to unsubscribe. These daily emails get subscribers to keep coming back
to the Groupon product a few times a week if not every day.
Takeaway:
Email
is a great way to get users to keep coming back to your product. It can
also be a great way to lose a customer. Value and respect the fact that
someone gave you their email address. It may be best to tell them up
front how often they can expect to receive mail from you.
So how do you know what frequency you should send email out to hit that optimal point of return?
Answer: Test. Test your email campaign frequency and determine which rate works best for your business.
5. Share with a Friend, Get $10 in Groupon Bucks
Groupon
turns their customers into marketers by encouraging them to refer
friends. Under the Featured Deal page, Groupon subscribers see this:
If they click:
The person can only get the $10 when their friend buys a deal. They don’t get $10 just for signing up a person.
The cost for Groupon to run this is $10 per person. According to Quora, the
lifetime value of a Groupon customer is around $25-$35. Groupon profit with this referral would be around $20.
Facebook is (as of January 2010) easily the
biggest referrer for Groupon. This tells of the powerful synergy of combining referrals and social media.
Takeaway:
What’s the
lifetime value
of one of your customers? Once you know it, try a referral system
similar to Groupon’s. Don’t just have an option for emailing, make it
possible for them to get referrals via social media.
Watch out for
fraud, some customers may refer a friend, have the friend signup, and
later the friend will cancel their account. Consider building a system
that can reverse the transaction if fraudulent activities occur.
6. Buy for a Friend
In
yet another way Groupon turns customers into marketers, they allow
subscribers to buy for a friend. If the friend is not a subscriber to
Groupon, they get a nice introduction to it by receiving a free deal
& see what process is like with Groupon.
Takeaway:
Your
customers certainly know someone who could use your software. It may
not work great, but try having a ‘Buy for a Friend’ or ‘Give [enter
product name] to a friend’. For most businesses, customers would rather
refer, but some unique businesses may be better served by a ‘Buy for a
Friend’ function.
7. Their Brilliant Copy

You’ve
likely noticed that outside of the daily deals, Groupon posts a
“Groupon Guide to [enter something weird here]” or something similar.
These short, humorous “guides” are quite popular. Each one gets at least
around 90-120 Likes, all of which drive traffic to the Groupon website
and offer page.
Takeaway:
It’s not about adding a
bunch of different components to your website and attaching the Like and
Tweet button to it. If you have something valuable that you think
people will want to share, whether it’s a product page, funny video you
made, or great copy.
Author: Zach Bulygo is a blogger for KISSmetrics, you can find him on Twitter here.