So you have been approached by a regional representative from a large online social coupon service provider (OSCP). Is this a blessing or not?

The Devil is in the Details, these service providers drive in revenue for themselves by claiming an average of 50% of all deals that you agree to run through them to their subscribers.

They will insist on promoting a discount that most merchants feel is extremely high. Typically the minimum amount they will agree to solicit to their subscribers is a 50% off deal and they will most certainly push for a higher discount. Their feelings are that if the deal is not compelling enough it will simply not generate the interest of their followers.

So make sure you understand the math.

Example:

Your flagship product (prime rib, kick boxing package, bungee jump sessions) costs $50. The OSCP will want to be able to offer their clients your product or service for a minimum of $25 (50%). Now remember the OSCP hasn’t taken their percentage yet so $12.50 (50%) of this will be going to them. Kind of reminds me of the old Eddie Murphy skit “I want half Eddie” – ha.

This is where most merchants will start to question if the opportunity is truly in their best interests. Is the OSCP building brand acknowledgement, customer retention for themselves or the merchant? This will depend on how well prepared your staff is to service the influx in traffic and just how well you negotiate the terms of your deal.

Some merchants were able to capitalize on the initial discount and generate repeat business from the deal while others were not prepared and it actually hurt their business. There are numerous reviews out there (www.hotcomplaints.com, www.measuredup.com) where you can see how both customers and merchants alike were not happy with the end result. However there are many merchants who prevailed and were able to generate loyal customers from the heavily discounted offering.

How do I make sure my business is a winner?

• Do your homework, perform online searches and read how other merchants in your industry negotiated their terms
• If you have an introductory product that you consider a loss leader, work with the OSCP to promote that item
• Make sure the time period for folks claiming their deal jives with your businesses seasonality / staff schedules
• Capitalize on the new traffic by collecting contact information from the new patrons. If it was a loss leader product / service promote receiving additional coupons by signing up for your businesses email list

So prepare for your meeting with the OSCP Representative and remember it is a give and take experience. If the deal is negotiated correctly it can be a great resource for new clients. The willingness of the Representative to negotiate will have allot to do with area presence, similar offerings, and what his competitors our offering.

I hope you find this information Profitable.