Some small business owners like to wax lyrical about how Groupon is detrimental to their business: it cheapens the brand, it trains consumers to be bargain-hunters, it kills margins, it rarely results in brand loyalty, etc. However, the fact is that we know that consumers have been giving Groupon a lot of money since its inception (about $800 million a year now), so for small business owners to avoid considering Groupon as a tactic within their marketing strategies would be negligent at best.

Here are some reasons to give Groupon a go:

1. Groupon is to small businesses what free samples are to chocolates.
Groupon is a low-risk way for consumers to try out brands that they would have otherwise avoided or even product/service categories that they would not have paid for previously. Some services have high price barriers, making it almost impossible for these businesses to expand their customer bases beyond their regular customers. Like it or not, Groupon has the ability to generate awareness and increase brand visibility by guaranteeing a fixed number of paying customers from the outset (margins are another story, but getting people through the door in itself is no mean feat).

2. Groupon generates leads for the businesses themselves to engage and win over.
By its very nature, Groupon attracts a large group of different consumers, not just bargain hunters. Complaints about customers not returning after the first try or customers behaving unreasonably cannot be piled on Groupon alone; after all, Groupon generates leads in the form of low-margin sales for retailers and small businesses for upselling or to convert into repeat customers. In other words, Groupon is meant to generate the opportunity for small businesses to engage x number of consumers, where x is a large number, but does not purport to generate repeat customers. Responsibility of the latter should fall on the small businesses themselves.

3. Groupon exposes weaknesses in small businesses, which helps diagnosis.
The less-considered impact of Groupon is that it causes small businesses with fundamental problems to blame Groupon when their inherent shortcomings become more visible upon running a Groupon deal. For example, many retailers say that they cannot “make the numbers work” for them, implying that they are basically competing on low margins from the outset, which may be a problem in itself. Also, if a small business needs to provide massive discounts simply to acquire customers (not for any specific purpose like exploring a new market segment), it reflects poorly on the merit of their current offering and customer acquisition plan. The fact that they are unable to convert first-time visitors into repeat customers, despite the large sample size provided by Groupon, may also indicate a problem with their ability to retain customers.

Ultimately, the correct way to assess the potential of Groupon should be to view it in light of its intended purpose: a marketing investment, not an engine to drive short-term profits. If small businesses think of it as an advertisement engine that is capable of generating a large number of guaranteed leads, perhaps small businesses would know better than to use Groupon simply to boost short-term sales.