Groupon's rules of engagement

Back in August of last year when I took my first discerning look at using Groupon as a marketing tool for flight schools, I admit I was a bit reluctant. The word on the street in most industries was that this was either a very powerful or very challenging marketing tool. Some industries raved about it. Others seemed a bit lukewarm on the whole idea.

Since the initial research in August of last year, I've come to realize that there is no one single answer as to whether Groupon is great or merely good for flight schools. I do know that it's like many other marketing tools: It depends on how you use it, and how committed you are to making it work for your school.

Here are the nuts and bolts of how a Groupon deal works.

1. Groupon sends out one deal a day to its subscribers in a specific, targeted metro area. Their marketing copy claims that their subscribers are educated, upscale female consumers that have disposable income. If your school is like most, the amount of female customers you have is probably less than 25 percent. Groupon can potentially help you reach out to a market segment that is historically under-reached by our industry. Even if you doubt that female consumers are still your target market, many female consumers will have spouses, a significant other, or other friends and family members that they would give or recommend the first flight deal to.
2. Groupon handles the online billing for the deal, and they pay you in a number of installments over the life your deal. For example, if your Groupon deal is valid for redemption for one year, expect to be reimbursed over that year in three or four installments. They do this to make sure that the business doesn't take the money up front, close up shop, and leave the consumers high and dry.
3. The kind of deals they’re looking for are somewhere in the 50 percent off range of what you normally charge for a given service, widget, or product.
4. There is no up-front capital required on your part. However, Groupon will keep somewhere up to half of the price offered on your special deal. Net-net, if you normally offer a discovery flight for $99, and you offer it on Groupon for $60, Groupon will keep half of that $60 amount and the tax on the whole price. Net-net, you’re getting just under $30 for a discovery or intro flight. (I'll cover more about how to offset this cost reduction in a follow-on article.)
5. Your offering doesn’t become active until enough people commit to buying it. Once it reaches that level (they call it tipping), those people will be billed, and they’re locked in.

Now that you understand the basics of how Groupon does what they do, how can it be best harnessed to work for your school?

1. Be specific in your deal. I can’t stress this enough. Work closely with the Groupon salesperson to make sure your ad copy matches the letter of what you’re offering. Make the ad copy foolproof, really foolproof. Misunderstandings here can lead to reverse word of mouth for your school. Not good for you. If there is an omission or error on your part in the ad, be ready to live with it and fix it.
2. Consider limiting the participants on an intro flight to one individual (there may be some exceptions to this, which I'll cover later). Otherwise, you might get too many happy couples that want an inexpensive sightseeing flight rather than prospects with a bona fide interest in flight training.
3. Consider limiting the age of the individual on this ride to 17 or older. Say so in your ad. You probably don’t want the 12-year-old birthday ride at this reduced rate. Keeping it at a legal-to-start-flying age is a great idea. Also consider limiting the total number of participants in the deal. This is something that Groupon may or may not offer to you. However, they have agreed to do this in the past.
4. Consider putting together a package deal with a school hat or T-shirt, initial logbook, and discovery flight. It’s better if you do this in a way that doesn’t match a current offering on your website. “It’s our special Groupon package,” in other words.
5. If you can get Groupon to agree to send you a copy of the final ad before they publish it live, do so. This will remove the possibility for any typos on their end, and help to ensure that you are on the same page with each other.
6. Make sure that you specify what your normal business hours are in the ad, and that the redemption of the special deal can only be made by appointment, and the flight is weather dependent.
7. Historically, the chances for a landslide response are much greater than a no or low response. Be prepared for both scenarios!
8. Finally, have a welcome package of flight training info ready for each participant to take home with them.

Next time, we'll cover the finer points of structuring a smart package offering that works for accelerating your Groupon deal, what results other schools have received, and how you can get the most from the people that come to your school to redeem their deals.

P. Jerry Lee is president and founder of aviation marketing and sales training firm Mach1 Consultants.