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Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

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Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#131

Post by TheRealDunkirk »

saalweachter wrote: post #62
mooreds wrote: post #9

Earlier quoted context omitted.

My brother in law runs a restaurant back east, and he said that Groupon has been a great channel for driving business. Anecdata, I know. I think there's a business opportunity to help people running groupons capture the most value out of the leads (at the least, sign them up for an email newsletter).

It could also vary widely based on whether or not advertising was a business's greatest problem. If your biggest problem was that not enough people know about or had tried your restaurant, Groupons probably did a lot of good. If your biggest problem was that your food wasn't really that great or your prices were too high or you were in a terribly inconvenient location or your staff was unbearable, then getting more p…

I think you're right, and I think the facts coming to light, even just in this discussion, prove that the vast majority of businesses trying to make magic happen with Groupon were just not sustainable. Groupon has ridden the notion that small business owners could get a "web 2.0" surge to success. What's happened is that entrepreneurs have burned through their startup budgets, and ignored sound business sense in favor of fadish practices. Really, Groupon has bled a bit of startup capital out of the economy. It's not a zero-sum game.

It's like how online journalism is collectively wringing their hands about ad-blockers and crying, "But what about the CONTENT?" Well, most of what passes for "content" these days is regurgitated click-bait non-sense, recycled in a dozen places, and it should all just go away anyway. Cry me a river. In both of these cases, the "good" notion of capitalism is working just the way it's supposed to.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#132

Post by RyanZAG »

bane wrote: post #127
RyanZAG wrote: post #121

Earlier quoted context omitted.

Isn't this the whole problem? You used Groupon to do a bunch of stuff you wouldn't normally do at below cost. That's great for you. It's also exactly the opposite of providing value for a business as you're going to hop to the next Groupon deal instead of sticking to that first Scuba company. You'll probably never Scuba again as soon as the coupon expires. EDIT: I think you might be right that it could work though. I…

One of the problems with Groupon is that it's not just a marketing expense. It brings people in which need to be serviced, which ties up the normal operations for the business. Businesses do retain some customers via Groupon, but it's probably less than 10%, and I think those retention rates need to be better understood so businesses can better reason for how to use it as a marketing tool.

Yeah, was in the $Z I mentioned. It's actually more than just using up normal operations. Most physical businesses have a core group of users that like the 'ambiance'. When you bring in all of these new customers, you break that. Maybe it's too crowded for two weeks, maybe wait times get too long. That leaves a bad impression on regulars who might be less keen to come back. So as soon as the coupon expires, you nearly all the new groupon customers and you've lost a share of your regulars too! That has to go into $Z too.

I get the feeling just estimating $Z is a major task, and needs to be done for every customer. So I'd guess the next 'Groupon with AI' would need to be structured around helping businesses that use them minimize $Z.

I think it's a good market actually - but it's going to need a lot of finesses and expertise. The groupon method of bludgeoning businesses with quantity didn't turn out to be correct.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#133

Post by larrys »

deepanchor wrote: post #64
hnal943 wrote: post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

My experiences with Groupon mirror your own. Whenever my friends and I would show up to a business with a Groupon, we would be treated with bad attitudes, worse service and just general reluctance when the exact opposite should have been true. I mean, that is the entire point of Groupon right? To promote a business -to spread the word on the street about how great your restaurant/bowling alley/pub is. Sadly, it has b…

This mirrors somewhat my experience many years ago with bartering. The places that were bartering were doing so because it was some low hanging fruit way to increase business and it was easy to to. And they were places that weren't particularly popular on their own (restaurants let's say) so they would do bartering to bring in customers on Monday nights but not allow it for obvious reasons on Saturday or Friday night. There is always a feeling on the part of small business owners that barter dollars are not real dollars (even though there is value in many cases) and barter business is not real business. A place that isn't doing that well to begin with (and once again I realize this is a generalization that is not true in many cases) is not going to have the best employees or the best attitudes because they are running short on cash and can't pay the best wages or have the best working conditions. So it's an entire ecosystem of mediocrity that you (in your case or me in my case) might end up experiencing.

So I guess in theory someone taking groupon (or barter dollars) should just be a regular business that is doing well wanting to increase business. But in actual cases it might more often (from my experience at least) be a marginal business that is trying to fix a situation with marketing that isn't exactly going to work as planned by bringing in groupon dollars or barter dollars (that will end up being used by the owner to go out to dinner with his wife (and yes that is what happened)). Valuable things (in the case of barter dollars) that a business needs are not typically available with barter dollars. What you get is a bunch of things like dining, travel or accountants or attorneys (and how many of those do you need).

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#134

Post by BashiBazouk »

RyanZAG wrote: post #120
zck wrote: post #107

Earlier quoted context omitted.

But shouldn't Groupon just be a marketing expense? I'm not saying that the company should be ok losing money all the time, but it's common for companies to spend money to acquire customers. Do you avoid all "new customer" deals? It seems like companies on Groupon, for whatever reason, often offer way more of a discount than they're comfortable with. I wonder why that is.

It's not always the company. In the case of the USA and their insane tipping customs, a customer coming in with groupon specials is going to end up tipping less. Since the whole service at USA restaurants is based around tipping, the employees know they won't really get tipped well so they're very customer hostile.

Maybe that's an upside. If the wait staff loses it's professionalism that easily, it tells me something about the restaurant...

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#135

Post by dragonwriter »

CPLX wrote: post #110
dragonwriter wrote: post #51

Earlier quoted context omitted.

The value proposition with Groupon is largely that you are selling a limited deal at promotional prices (i.e., ones which you would not be profitable sustaining) to build business. It was essentially, when it was novel, a new acquisition channel. Even business owners that new their margins wouldn't know its value to their business without testing it in their actual circumstances.

> It was essentially, when it was novel, a new acquisition channel. It also had a touch of loan-sharking from what I understand. I could be wrong about the exact details but I believe one of the main attractions was that a business could do a Groupon, and get all the money from the Groupons sold as soon as the promo was completed, but still have weeks or months for the customers to actually trickle in and claim the o…

How is that "loan-sharking"? Seems to be pretty much just run of sale of redeemable credits. Loan-sharking means that someone is making money by charging high interest rates on loans -- here, the "loan", insofar as there is one, is effectively from the customer to the business, and there is no interest being charged on it.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#136

Post by tcdent »

deepanchor wrote: post #64
hnal943 wrote: post #41

Earlier quoted context omitted.

I stopped using groupon because of the near-universal resentment I felt from the employees of the stores selling the groupons. Clearly, these businesses weren't getting the value they thought they would get, but I wonder how much of that was the way they treated the new customers that the groupon generated.

My experiences with Groupon mirror your own. Whenever my friends and I would show up to a business with a Groupon, we would be treated with bad attitudes, worse service and just general reluctance when the exact opposite should have been true. I mean, that is the entire point of Groupon right? To promote a business -to spread the word on the street about how great your restaurant/bowling alley/pub is. Sadly, it has b…

This is the same reason why I'm careful which site I book hotel rooms on. Years ago I thought hotels.com was great and convenient, now I realize your experience is tainted from the moment you book with a third party. Now I make every attempt to book direct.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#137

Post by alasdair_ »

bbarn wrote: post #50
hcrisp wrote: post #10

Will Groupon founder Brad Keywell's newer venture, Uptake, face a similar outcome? A recent Forbes article suggests he's better at starting a company than running it.

Chicago dev here. Lots of friends in the groupon circle I know have been unhappy and left. Know two people at uptake, both miserable there. They seem to have a big problem with claiming/trying to be a great place to work, but executing poorly.

Groupon was, at one point, the largest rails install in the world. They had some REALLY good Rails guys. Then they ditched the entire codebase for node.js and a lot of the best Rails developers quit soon after.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#138

Post by RyanZAG »

pmelendez wrote: post #130
RyanZAG wrote: post #121

Earlier quoted context omitted.

Isn't this the whole problem? You used Groupon to do a bunch of stuff you wouldn't normally do at below cost. That's great for you. It's also exactly the opposite of providing value for a business as you're going to hop to the next Groupon deal instead of sticking to that first Scuba company. You'll probably never Scuba again as soon as the coupon expires. EDIT: I think you might be right that it could work though. I…

>That's great for you. It's also exactly the opposite of providing value for a business as you're going to hop to the next Groupon deal That's not always true. I rarely use a groupon alone and ending buying addons at the regular price. You might lose money in one item but win in another. That's why retails focus in bringing you to the store not matter what.

Yeah definitely. It's why I added that 'edit'. You're the type of customer that Groupon needs to be selling on to businesses. They need to identify people like you somehow and offer you coupons, while denying coupons in some way to people just looking quick discount hopping and ultimately making groupon a negative instead of a positive.

I think retails focusing on bringing people into the store is different for an important reason - when you're inside the store and buying something, it's almost guaranteed that you want a few other things too. You could jump between 10 stores all with different specials to get all of them cheaper but that's incredibly time consuming.

Groupon however is trying to get return customers. It's not about someone doing Scuba diving picking up a few extra scuba diving lessons while he's there - he has to actually come back later. It's no longer an impulse 'easiest path' purchase that retail focuses on by getting you in their store and not the store down the road.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#139

Post by kkhire »

zck wrote: post #107
JoeAltmaier wrote: post #75

Earlier quoted context omitted.

I thought that before even trying Groupon. I can't imagine how coming in as a 2nd-class customer will improve my experience. Rather pay well, tip big and enjoy the best service they have to offer. Also, as an Engineer with a 1st-world salary, its socially responsible for me to spread it around.

But shouldn't Groupon just be a marketing expense? I'm not saying that the company should be ok losing money all the time, but it's common for companies to spend money to acquire customers. Do you avoid all "new customer" deals? It seems like companies on Groupon, for whatever reason, often offer way more of a discount than they're comfortable with. I wonder why that is.

I like to compare it to the research done on olympics and their economic impact. Big investment in hopes of a strong injection in the economy.

The opposite happens, once the event is done, the facilities/stadiums/everything goes unused -- novelty and interest lost.

Same thing happens to these business when they worked with Groupon: make some money (oftentimes they don't even break even) during their promotions/deals, but as soon as it was over hardly any bothered to return.

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