Since its launch three years ago, Groupon’s business model has focused on signing up merchants for one-off deals in hopes of attracting new customers. Now, the coupon site is changing gears and is planning to introduce a new program for rewarding return customers.
“We think there are three components merchants need to run their business in the new world of local commerce,” Groupon’s senior vp of product Jeff Holden told TechCrunch. “The first is the daily deal, which Groupon perfected as a customer acquisition product and reached massive scale. The second is Groupon Now, its mobile app that lets local merchants do yield management by offering deals when business is slow. The third now is Groupon Rewards, which is built around customer loyalty and retention.”
Using Groupon Rewards, merchants that already offer Groupon deals will be able to give loyalty perks to customers who make repeat purchases. So when a customer spends a certain amount of money at that business over a period of time, they’ll unlock a Groupon Reward—like $25 worth of goods for $5.
And to make it easier for everyone, there won’t be any NFC chips or check-ins required. Groupon will track purchases made through buyers’ credit cards registered on its site, so customers will automatically get rewards as long as they continue to use the same card.
The biggest perk for Groupon is the ability to track customers’ spending on the merchant side. With regular daily deals, Groupon only sees how many are sold and doesn’t know how much customers are spending at the merchants or whether the coupons are redeemed at all. Now, with Groupon Rewards, the company will get a better idea of how its business model is working on the redemption side.
Merchants will be able to sign up for Groupon Rewards starting tomorrow, and customers will start seeing rewards in mid-October.