Groupon is a fascinating study in the fusion of online and offline marketing tactics to drive local business. Couponing sites have come and gone over the years, but Groupon’s connection to social media is turning it into a bit of a movement.

A typical Groupon offer. Click to enlarge the image.

Here’s the basic idea: People sign-up to receive a once daily offer from local merchants. It’s one offer only, in one of the 29 or so cities (more soon) that have Groupon groups. But, the offer does not kick in until a set number of people jump on board. The offer also involves a buy in. In other words, a typical offer might look like the one in the image here – “Spend $12 to get $25” from a local pizza place. People who want the deal have to spend $12 to get it. Watching people react to the daily offer is where you can witness the brilliance of this play. Because someone really wants that 1/2 off massage and can’t get it until the set number of people buy, they get very active online pushing the offer out for the participating merchant. (Learn how Groupon works here)

Groupon allows businesses to find new customers online, but then drives them to that local place of business offline. Once they show us, they are already a customer and the business have yet to spend a dime to get them there. Hum, pretty cool.

Groupon groupies are nuts about this tool and you should just sign up for the Groupons, but small businesses of all kinds should take a look at this lead and customer generation tool.

If you’re in a business like pizza or dry cleaning, one that offers coupons anyway, this is a great way to get even more exposure. If you’re in a business that just needs new customers, Groupon might be a big hit. It’s not unusual for Groupon offers to have hundreds of people buy in. Groupon collects the money and sends the business a check. The business then just goes about honoring the Groupons as they show up. (Learn how to get your business on Groupon here)

I’ve used Groupons on several occasions and in all cases it led to me a business I had never done business with before. Get creative and take a good, hard look at Groupon.