Services Combine Social Media, Marketing
Some small businesses are experimenting with new Web-marketing services that integrate social media. While entrepreneurs say they’ve seen some positive results, some of the services carry hefty fees and their long-term value remains unclear.
Start-ups like Groupon Inc., LivingSocial, BuyWithMe Inc. and IMshopping Inc.’s NimbleBuy let merchants offer one-day promotions, sometimes requiring a minimum number of customers to participate in order for the promotion to be valid.
Balani Custom Clothiers Inc., a Chicago men’s suit and shirt tailor, offered a promotion through Groupon where, for one day in October, consumers could spend $95 on a gift certificate from the tailor shop valued at $225 that’s redeemable for up to one year. But at least 50 cards needed to be purchased for any to become valid.
“Since a certain number of consumers must buy in to activate the deal, consumers are motivated to spread the word about it,” says Andrew Mason, founder and chief executive of Groupon, which features mainly small businesses in about 40 U.S. cities.
Balani Custom says it met its quota—a number the company decided on with help from Groupon—in less than an hour of the deal going live. It sold 850 gift certificates that day—the maximum the four-employee shop determined it could handle.
