This article makes a good point. It’s titled How To Compete With A Million Other Groupon Clones: Find A Niche.
Groupon is a “daily coupon” website. It’s basically an email list that charges advertisers to send out their “coupons” called Groupons.
Many small businesses I’d likely never hear about otherwise send me their coupons this way. I receive them mainly to see what’s up… because the city I receive them from is 2 hours away, I don’t expect to take advantage of them.
I have noticed that for the most part, these are not large mainstream businesses. They are small businesses – spas, bakeries, etc. that likely don’t have large advertising budgets.
But there are many more competitors, including Daily Deals.
They conclude that niche sites do better and, in the long run, will have a higher profitability.
The key is to get a huge email list. The more predictable the behavior of the list the higher the ad rate a customer will pay to get that message out.
After all, if you’re a day spa, would you rather send your message to 10,000 guys like me sitting in the sticks 2 hours away that signed up on a lark to see what coupons they’d get? Or would you rather send your message to 10,000 desperate housewives who think getting a deal on a spa day is just what they deserve after changing a stinky diaper?
In small towns, you’d likely choose a different niche. People who go out to buy lunch or something. But as they suggest, the key is the niche.