NEW YORK (MainStreet) — Groupon launched a new customer rewards program Wednesday in an effort to help businesses that partner with the daily deal site to build a more long lasting relationship with customers that goes beyond a single deal voucher.
With the new program, customers who shop at a store repeatedly and spend more than an amount designated by the merchant will be rewarded with steeper discounts through Groupon than the website offers other customers. So while Groupons have traditionally offered deals in the range of 50% off, a Groupon Reward might give regular customers access to an 80% off deal at that retailer.
“Consumers earn rewards at participating merchants simply by paying with the credit or debit card they have on file at Groupon.com. After spending an amount set by the merchant, the consumer unlocks the ability to purchase a special Groupon for that business,” the company explained in a blog post.
The service functions just like traditional rewards cards, but as Groupon points out, shoppers don’t need to sign up for a special card or create a new account. Instead, all one needs to do is shop at participating retailers using whichever credit or debit card is connected to a Groupon account and the website will notify the user when he or she has spent enough to qualify for an offer through the rewards program.
On the supply side, all the merchant needs to do is alert Groupon how much customers must spend in order to qualify for a special bargain. Groupon will handle the rest, including providing merchants with detailed analytics that track new and repeat customers who have found the store through Groupon and how much they spend. The program has been in a test phase in recent weeks, but all businesses will now be able to sign up for free.
For months, Groupon has offered a different kind of rewards program that lets customers earn credits – or Gs - for each Groupon purchased, which can then be redeemed to purchase more deals, but the new rewards program is focused more on encouraging customers to shop repeatedly at particular stores rather than to shop at Groupon, and for good reason.
The daily deal site has been criticized for being a bad deal for small businesses - because frugal customers who redeem a Groupon voucher at a store may have little incentive to return unless there is another big bargain - even though much of the incentive for businesses to partner with Groupon is to attract a broader customer base. The new loyalty program could just solve this problem for businesses and help consumers earn a few extra deals in the process.
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