By Kara Apel
Edited by Anna Chambers
The phone has been ringing all day at the Southern Vistas landscaping and gardening center. Its Groupon ad was posted a few hours earlier, and people have been calling to see what the Commerce Drive store has in stock for their $12 coupon worth $25 of plants and garden supplies.
More than 700 customers bought the deal during its first 24 hours and more than 900 bought in all, but owner Mark Schimmoeller was still wary before signing on.
"I may live to regret it," he said.
Groupon, a coupon website that launched in November 2008, offers deals of the day if enough people sign up for them. It has over 70 million subscribers and deals for over 160 cities.
The website collects half of what a customer pays for each coupon, while the rest goes to the business offering the deal.
Columbia's Groupon page launched in November, and Schimmoeller, like other local business owners, decided to give it a try because he thought it could boost marketing and attract more customers to his garden center near Hamilton-Owens Airport.
Kelly O'Neill, a Groupon spokeswoman, said by email that Columbia was a good fit because of the University of South Carolina's presence and the city's art districts, galleries, shops and restaurants.
The marketing coordinator for the Rosewood Crawfish Festival also decided to test Groupon, selling $6 tickets, half of the regular price and $2 less than prepaid tickets for the April 30 event.
Geah Pressgrove said she wanted to get the event's date out to local residents and boost word-of-mouth marketing.
The 500 quickly sold out, and Pressgrove said she has been pleased.
Kimberly Dressler of Columbia said checking Groupon is part of her morning routine and that she has bought several promotions and enjoyed them all.
Her favorite has been a Groupon deal that she used before a wedding in Cincinnati. It offered $150 of salon services for $40.
"It was a great deal for a salon day that we could all go to with the bride," Dressler said.
But when Trustus Theatre used Groupon to sell tickets to Thursday night performances of "Reasons to Be Pretty" in October for $10, half of the regular price, it lost money and probably won't use this kind of marketing again soon, box office manager Joe Morales said.
"It sounds good on paper, but in reality, it wasn't a good fit for us," he said.
Utpal Dholakia, an associate professor of management at Rice University who published "How Effective Are Groupon Promotions for Business" last September, said Groupon ads were effective for two-thirds of the 150 businesses that ran promotions between June and August of 2009. Most of the rest lost money.
According to the study, published on the Social Science Research Network, one in five businesses would not use Groupon again.
At businesses without effective promotions, customers did not spend more money than the coupon's worth, he said. These businesses also did not see many of the Groupon customers returning for additional visits.
Dholakia said planning was essential and that most businesses weren't prepared to handle so many people showing up in such a short time.
Schimmoeller said he prepared for a rush as much as he could by ordering items ahead of time, and it's good he did, because he saw an influx of customers that Saturday.
"Everybody had a Groupon in hand," Schimmoeller said.
Around 250 customers have used the coupons so far, Schimmoeller said, and he wouldn't hesitate to use Groupon again because of the good response he's received. However, he thinks every company should be cautious before using the website.
His promotion did well because of the seasonal timing, Schimmoeller said.
"Everybody's thinking of gardening this time of year," he said.
Businesses that use Groupon should not rely solely on the website for marketing, and Groupon should be only a small part of a business's advertising strategy, Dholakia said.
O'Neill recommends that businesses know their goals before launching an advertisement. Merchants get extensive preparation tools and should use them, she said.
Groupon has two area representatives recruiting businesses and has added Charleston and Greenville.
At Occo Spa, owner Gregory Conde decided not to jump on the coupon bandwagon but keep instead his loyal customers happy and maintain the high-end spa's status quo instead.
"We don't want clients that are discount shopping; we want clients that enjoy coming to this spa," Conde said. "We want repeat business, not just coupon business."
Conde is wary of Groupon's motives.
"They're in it for the money; they're not it in to build your client base," Conde said. "It's all about money for them."
Southern Vistas attracted more than 900 customers with its Groupon ad, which provided a non-traditional source of marketing.
