A year ago, I started a chocolate catering company in Dallas. No, it wasn’t so I could pick up more women. I just really like chocolate and so does my business partner, so it seemed like a good idea at the time.
As expected, half of my time is spent on marketing the business. Over a year, we relied mostly on referrals, but also had the chance to test the effectiveness of kgbdeals, a Groupon and LivingSocial competitor.
Coupon companies make it easier to build a client list and generate traffic, both online and off, but the experience could leave business owners a bit sour if they’re unprepared. I’m almost completely bald just from our venture.
Our deal on kgbdeals offered our ultimate chocolate gift box at a hefty discount (73% off), and the experience was both horrifying and educational. If you’re thinking of doing the same, there are a few things to consider before you commit to running that crazy coupon:
Determine if your business type is ideal for running a coupon
We run a product-based business. Simply put, we sell a product: handmade chocolates. To create that product, we generate expenses from ingredients, shipping, and so on. Those expenses eat away at profits, and as our inventory runs low, we resupply, and then we cry, and of course that creates more internal work and tension. It’s even more difficult if you offer a handmade product.
Service-based businesses (like spas), on the other hand, don’t have to rely heavily on inventory to sell services. As a result, most of their expenses aren’t generated by tangible supplies. That means less logistical crap to deal with, and it really just comes down to booking customers.
If you’re running a service-based business, an online coupon makes sense. Otherwise, if you’re selling a product, it can become difficult to keep inventory in check if you become overwhelmed with orders.
Call in reinforcements to field questions
The most obvious challenge when running a coupon is the amount of calls it generates. Even if you’ve outlined the fine print in painstaking detail, customers will call with questions. Some questions are perfectly valid, some will test your sanity, and others will simply make no sense. Regardless, if you’re running a deal, have someone on phone duty until that deal ends. And give them a raise.
Make sure your coupon’s fine print is well thought out. Keep in mind that customers will take every word literally. If the print says to order products 10 days in advance (like we did), customers will call after 10 days asking the status of their order.
Add an FAQ page to your company’s website addressing coupon-related questions that might arise. Online FAQ pages help reduce the number of calls.
Also, if your company has a voicemail or answering service (you’d be surprised at how many still don’t), update both to address any immediate questions related to the coupon.

The 73% discount we offered on our Ultimate Chocolate Gift Box was a tad insane.
Find a balance between an aggressive deal and profit
When structuring your deal, it’s easy to shortchange yourself by creating a discount that’s overly aggressive. After all, the more aggressive the deal, the more attention you’ll get. Balancing between an aggressive deal and one that’ll still turn a profit is not easy, but you can test your audience by running a deal of your own first, either through local advertising or via your website.
And don’t just run one discount – run several. You’ll have complete control over the offers you provide, while collecting feedback from customers. Use that information to structure your deal with Groupon, LivingSocial, or kgbdeals. You might even be able to use the feedback to leverage a better deal with those companies.
Establish a physical storefront for walk-in customers
Even though our catering company uses a commercial kitchen, we don’t have a space open to the public. That means they can’t come in, browse around, and sell themselves on other products we carry. In retrospect, that was our biggest disadvantage.
If you happen to own a storefront, then it’s easier for customers to browse and buy more products, which helps offset the discount you provide on an online coupon.
But if you’re like us and have nothing open to the public, be aware that customers are less likely to purchase additional products (or services) if you’re simply operating from a virtual storefront or taking orders via phone.
Oh, and inevitably, at least one customer will yell at you. That’s just how the chocolate-covered cookie crumbles.