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Groupon Moves Into Business-to-Business Marketing [Update]

Groupon gained its high profile in delivering product and service deals to consumers (plus attracting a $6 billion Google (GOOG) acquisition bid that Groupon turned down). Now there is evidence that the company is experimenting with a new direction in generating revenue: business-to-business deals.

Model Metrics, a consulting firm, has offered a show special at the Dreamforce cloud computing event. The company offers its customers or show attendees $2,500 of data analysis for $600. According to Model Metrics, Groupon is one of its clients, which might partly explain how an experiment might have come about.

What makes this noteworthy is Groupon's expansion into a new area. Marketing is usually split into two camps: that focused on consumers (business-to-consumer, or b-to-c), and activity by companies that sell to other companies (business-to-business, or b-to-b). Although the same principles apply, execution is often different. In addition, campaigns and budgets don't overlap.

It means that a marketing services company can typically expand its activity and revenue if it can work in both areas. Traditional coupon companies focus on b-to-c activity through a variety of means, including coupon direct mail packages and Sunday newspaper circulars.

But such vehicles generally don't reach people in a business setting. Corporations can be tight on allowing obvious examples of junk mail onto their premises, and traditional vehicles for coupon deals aren't effective.

However, a permission-based email mechanism like Groupon could offer entry. The difficulty would be finding customers who would be potential prospects for any given offer. A company that manufactures heavy equipment might consider a special on steel, but not on lumber. Businesses are far more specific in their needs than consumers.

Furthermore, selling to a corporation would generally involve its procurement department, to say nothing of having to meet specifications. It's why the Model Metrics offer through Groupon is well-conceived. By opening the offer to show attendees, the companies target those who are more likely to have interest in the offering. Also, because the price tag is relatively low for corporate spending, technology executives might be able to authorize the expense on a service without getting purchasing executives involved.

I have an email in with Groupon and someone is trying to get an answer. But, in the meantime, the next logical step for the company would be to expand the services:

  • The company could work with conference and trade show companies that have qualified attendee lists to develop short-term campaigns.
  • Professional and trade organizations would be similar sources of targeted names.
  • Businesspeople could conceivably sign up with a special version of Groupon and provide their areas of interest to get better targeted deals.
Groupon reportedly could see around $500 million in revenue this year. Adding b-to-b could conceivably help propel even larger sales.

[Update: According to a Groupon spokesperson, this is a "one-off" deal, but the company is always looking for new revenue sources. My translation: If they can find ways to make money off it, expect them to take a big interest. It certainly seems like a large potential opportunity for the company.]


Image: Flickr user Bramus!, CC 2.0.
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