Groupon, a collective coupon-purchasing website, is earning its stripes as an effective marketing tool. But can it work for the woodworking industry? It already does, according to the company.

“Groupon is really the first way local businesses have been able to use the power of the Internet for marketing purposes. It’s an extremely effective and powerful marketing tool, to really generate and get customer traffic,” says company spokesman Chad Nason.

Nason says Groupon represents a variety of industries, from restaurants and spas, to niche businesses like woodworking shops, as it’s designed to engage subscribers in their local community. Created in 2008, it grew out of a website called The Point, run by Groupon CEO and founder Andrew Mason.

The Point was initially a collective action site for fundraising that evolved into a resource for the public to join together to get collective discounts, such as lower magazine subscription rates, Nason explains. From there, Mason created Groupon to focus solely on that aspect. The first Groupon merchant was a pizza restaurant called The Motel Bar in Chicago, located in the Groupon office headquarters.

“About 50 Groupon coupons were sold from the get-go and the site took off from there. Groupon now operates in over 45 countries with more than a million subscribers across the world.”

A subscription to Groupon is free to anyone with an e-mail account. Subscribers can log onto www.groupon.com, enter their e-mail address and sign up for a particular market. In the U.S., there are more than 175 markets. A daily e-newsletter is sent to subscribers, featuring coupons that they can purchase online for a discount on goods or services. Coupons can be printed or presented in a digital format.

The coupons are always at least 50 percent off either specified or general merchandise, says Nason. For example, a typical coupon for $30 worth of restaurant food would sell for, at most, $15. Groupon gets a percentage of that coupon sale going to the merchant. The deals are available for 24 hours and are renewed every day. Once purchased, the buyer has six months to a year to redeem it.

In addition to helping merchants get better exposure to the public, Groupon helps them track and assess their customer base, Nason adds.

“Traditionally, merchants would place an ad in the newspaper, phone book or with their local TV station. But when you do that, you never really know where that money goes. With Groupon, you’re seeing these people come into your business, either with Groupon up on their smart phone or literally printed out. You can see those people that have taken advantage of the deal and use the opportunity to talk with customers and network through them for more business.”

A Rockler Woodworking and Hardware store in Sandy Springs, Ga., posted a coupon deal on Feb. 28, selling $20 Rockler purchases for $10 — giving consumers an immediate 50 percent value with the advanced purchase.

“In 24 hours, we ended up selling 198 Groupon coupons. The coupons are good for six months, so they have until Aug. 29. So far, we’ve had 75 redeemed for a total of $4,178,” says Jeff Slaton, the store’s assistant manager.

Slaton says the average sale at the store is about $61.44 when a Groupon ad is presented, whereas a typical regular sales transaction averages about $52. In addition, about one-third of those 75 coupons were redeemed by new customers. He says the Rockler corporate office used the Georgia store as a test site and will decide whether the company will work with Groupon again after the August expiration date when sales are analyzed.

Another Groupon success story in the woodworking industry is Riley’s Real Wood Furniture in Eugene, Ore., which sold 189 coupons for $50 apiece, good for $200 worth of furniture — a 75 percent discount, says Nason.

Nason emphasizes that because all businesses are unique, there’s no one way to create a deal. Groupon representatives can offer assistance.

Contact: Groupon Inc., 600 W. Chicago Ave., Suite 620, Chicago, IL 60654. Tel: 877-788-7858. www.grouponworks.com

This article originally appeared in the July 2011 issue.