Added July 25, 2011 by 523 Comments

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Email, Local, Mobile

Business at a Price: The Dark Side of Groupon-Style Email Marketing

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Groupon Small Business

In just two short years, Groupon-style sites have completely changed the world of email marketing. But have they changed it for the better? The folks behind Barkr, a new iPhone app that’s currently in beta, certainly don’t think so. Barkr shows deals to people as they walk or drive by brick and mortar businesses – Barkr wants small business retailers to know, however, that there’s a dark side to using similar “Groupon-style” email marketing services.

According to Barkr CEO Aaron Lindsey, “Many small businesses are voicing complaints about unacceptable deal terms, high costs, unhappy patrons, and slow payout schedules. Resentment toward the Groupon model runs deep.”

At the end of the day, Groupon-style sites leave retailers with approximately 20-30 cents on the dollar of the retail value for each transaction. Barkr instead charges a flat 18%.

Small Business Tip

Is a 70% loss in profit worth the publicity Groupon-style marketing provides? Think about it before you take the plunge.

“We understand that small businesses first require the freedom to customize deals and costs to their needs,” continues Lindsey. “By extending daily specials to people’s iPhones as they walk or drive by, we’re helping retailers reach new customers right then and there.”

Barkr is planning to release an Android version of the app in the next few months.

Do you have any experience (good or bad) using Groupon or similar email marketing sites (Livingsocial, etc.)? Tell us about it in the comments! We’re curious to know if you’ve been burned or if you’ve had good results.

Image source: Barkr

About Kevin HaynesFollow Kevin on Twitter

Kevin Haynes is the founder of WebMaxed.com. His personal mission is to make internet marketing easy and fun to learn for small business entrepreneurs (trust him, it's possible!). Kevin is a creative entrepreneur who's into meditation, delicious wine and food, traveling, and sweatin' off calories wherever his workout takes him.

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