Getting Into the Groupon Groove

I just paid off last month’s credit card bill, and couldn’t help but notice a slew of new transactions on my wife’s card from "Groupon Inc Chicago." Sure, I know about Groupon, but what I didn’t know was that I’m married to a straight up crazy Groupon addict. In June alone, she managed to gobble up 6 different offers, ranging from tapas to Thai food to day passes at a local health club. Shiatsu massage? Don’t mind if I do. Indoor rock climbing?  Why not?

Turns out she’s not the only one. I decided to dig into the data, and pulled some stats for to take a pulse on how this upstart business model is making waves. Looking at growth in Visits to the site over the past year, it’s clear that Groupon has ramped up acquisition marketing and opened its sizzling offers up to a massive consumer audience.

But how are they doing it? A business model that needs a critical mass to really succeed needs to cast a wide net to really ramp. I figured these guys would be crushing it with Search, delivering traffic organically, but also putting some effort into Paid Search. Guess again. Of the nearly 11 Million monthly visits to the site, only a few hundred thousand came from Search, and of those referrals, a tiny fraction came from paid clicks.

Referral data tells a different story, and breaking down the channels using the graphic below it starts to become a bit more clear: compared to other deals sites, Groupon is crushing it with Email and Social Marketing, leveraging deal hungry influencers (i.e. my wife) to spread the word and get those consumption juices flowing.

How much more can Groupon grow? How many ridiculously sweet offers will my wife take advantage of in the months ahead? Can a local business model achieve scale while staving off competitive threats? Stay tuned, as we’ll continue to track what’s happening out there in this highly exciting space.