Groupon, Aiming to Rekindle Success, Embraces Membership Model
The company, which remains publicly traded and active on the stock market despite losing its initial momentum, is taking a careful approach to building engagement by using a monthly membership model.
Groupon used to be the biggest player on the block, but its glory days are well behind it.
That said, the daily deals firm is still around, and it’s looking to build momentum around its once-very-buzzworthy offering. Given that state of affairs, what’s the plan?
The answer is a membership program. Last week, the firm formally launched Groupon Select, a $5 per month offering that gives members additional access to discounts, free shipping, and other perks related to its many products and services.
Among the deals: 25 percent off local programs, 10 percent off its travel-focused getaways, 10 percent off events, and specific discounts with brand partners. In the latter case, one already announced discount is 25 percent off tickets at AMC theaters.
The company launched the offering in a quiet way, signing customers up for the membership program in bits and pieces over the past year or so, according to ChicagoInno, which means that it has a base of 150,000 paying members at the time of announcement.
“Groupon Select is the best way to experience Groupon today and discover even more value on local services, experiences and goods,” CEO Rich Williams said in a news release. “It accelerates the savings we’re known for and makes Groupon an even bigger part of members’ daily routines.”
The program gives Groupon something that it has at times struggled with: A consistent revenue stream that isn’t so predicated on the whims of hype. It also has helped increase revenue streams elsewhere. Groupon spokesperson Nicholas Halliwell told ChicagoInno that thus far the offering has led to increased purchase frequency and a jump in total order value.
The membership approach effectively bakes consistent engagement into its existing offering, and as a result, differs significantly from its more traditional marketing-oriented strategies. In an earnings call transcript from May, Williams emphasized that the company had initially been quiet about the program in part because it wanted to ensure a program less focused on simply receiving buzz.
“In membership, it’s really about continuity,” he said, according to The Motley Fool. “And that’s where it counts, not just how many folks you can get in the program initially.”
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