Separately from my on-topic reply: you should consider choosing a login name different than a famous person -- even if 'Steve Jobs' is your real name.
Why Groupon hurts businesses and you should be careful
11–20 of 34 posts
Re: Why Groupon hurts businesses and you should be careful
#12Groupon is laughing at this and similar posts all the way to the bank.
Businesses bend over backwards to be on Groupon and there are few faster and cheaper ways to get a flood of new customers to try your service. It may be great for some and not so for others, but if you can't do the back of the envelope math (Posie's cafe) and ignorant to the risk (or success) of potentially 3,000+ people buying your groupon, then you have bigger troubles ahead.
Re: Why Groupon hurts businesses and you should be careful
#13Offering coupons of any kind (Groupon or not) is just another form of marketing. Whether or not it makes sense for a particular business is much more complex: different structures, margins, repeat customers, etc.
So a business "loses" a $1000 with their Groupon deal, they got people into their shop and at least it's a more measurable outcome than most print or radio ads.
Re: Why Groupon hurts businesses and you should be careful
#14Offering coupons of any kind (Groupon or not) is just another form of marketing. Whether or not it makes sense for a particular business is much more complex: different structures, margins, repeat customers, etc. So a business "loses" a $1000 with their Groupon deal, they got people into their shop and at least it's a more measurable outcome than most print or radio ads.
The key absent of measurement is the effect on the business, there is no point to a more measurable loss, in comparison to a less measurable profit.
I don't care to chime in to the debate on whether radio/print/groupon is effective as I think that like most tools it can be used properly or improperly.
Re: Why Groupon hurts businesses and you should be careful
#15The idea that providing a deal or deep discount will somehow reveal your price points, making people demand product at that price is ludicrous. When a business structures a deal of this nature they are doing so with their bottom line in mind, and should know that whatever money they recoup from selling the deal will at least cover their costs. The main idea behind running these deals is to get new business in your do…
Subsidies like these are inefficient for businesses because they don't discriminate between customers who are new to the business and regular patrons. It doesn't really increase demand so much as pull it forward a la "Cash for Clunkers" meaning you are subsidizing customers who would have bought anyways.
I think this is demonstrably false. The horror stories of businesses not being able to handle the huge flow of customers pretty much prove that many people would not "have bought anyways".
Re: Why Groupon hurts businesses and you should be careful
#16The idea that providing a deal or deep discount will somehow reveal your price points, making people demand product at that price is ludicrous. When a business structures a deal of this nature they are doing so with their bottom line in mind, and should know that whatever money they recoup from selling the deal will at least cover their costs. The main idea behind running these deals is to get new business in your do…
Subsidies like these are inefficient for businesses because they don't discriminate between customers who are new to the business and regular patrons. It doesn't really increase demand so much as pull it forward a la "Cash for Clunkers" meaning you are subsidizing customers who would have bought anyways.
Why not just make the groupon offer profitable and then the issue of discrimination becomes moot. The key to using groupon or any form of marketing is to improve your bottom line. The business needs to be setup in such a way that even if the groupon offer is a loss leader that the traffic generates additional revenue.
Re: Why Groupon hurts businesses and you should be careful
#17Groupon is laughing at this and similar posts all the way to the bank. Businesses bend over backwards to be on Groupon and there are few faster and cheaper ways to get a flood of new customers to try your service. It may be great for some and not so for others, but if you can't do the back of the envelope math (Posie's cafe) and ignorant to the risk (or success) of potentially 3,000+ people buying your groupon, then…
Posie's cafe - http://posiescafe.com/wp/?p=316.
Re: Why Groupon hurts businesses and you should be careful
#18Earlier quoted context omitted.
Subsidies like these are inefficient for businesses because they don't discriminate between customers who are new to the business and regular patrons. It doesn't really increase demand so much as pull it forward a la "Cash for Clunkers" meaning you are subsidizing customers who would have bought anyways.
I think this is demonstrably false. The horror stories of businesses not being able to handle the huge flow of customers pretty much prove that many people would not "have bought anyways".
In the case of certain Deal Providers, the one's who do not give the business much control over the details of their deals, I agree. However, this is not the case with a site called adility.com. They allow the business to control their deals and cut them off when the business so chooses.
You are making the assumption that these businesses only have a set number of regular customers and no idea how to interact with any new customers. Trust that any successful business will know how to and want to grow their business. It is entirely up to them how they handle whatever influx of new business they receive as a result of running a deal.
Additionally, while I agree that there have been a few horror stories, in what way does this prove that the people purchasing these deals "would not have bought anyways"?
The fact of the matter is that the majority of businesses are happy with the end result of running these deals. Most gain a significant number of new customers which more than offset any possible losses they may have had in running the deal in the first place.
The businesses who haven't been happy were either exploited by their lack of research into this growth model, or didn't have control over their particular deal. The latter again being addressed by a few new deal sites out there, adility.com being the first.
Re: Why Groupon hurts businesses and you should be careful
#19The idea that providing a deal or deep discount will somehow reveal your price points, making people demand product at that price is ludicrous. When a business structures a deal of this nature they are doing so with their bottom line in mind, and should know that whatever money they recoup from selling the deal will at least cover their costs. The main idea behind running these deals is to get new business in your do…
Subsidies like these are inefficient for businesses because they don't discriminate between customers who are new to the business and regular patrons. It doesn't really increase demand so much as pull it forward a la "Cash for Clunkers" meaning you are subsidizing customers who would have bought anyways.
Really? In what way? There are actually many methods available to track users of said deals and determine who is a repeat and who is a new customer.
You are missing the point of running a daily deal, it is not to increase demand so much as it is to increase exposure. Obviously no business could survive on these deals alone, which is why they are designed to only be for targeted periods of time and to targeted areas. The whole point is to get people in who are already in the market, but are tentative to try something new, or otherwise unknown to them.
Sure someone who buys a massage deal is probably going to buy a massage somewhere, but the beauty of running a deal is you have a better chance to expose that customer to your business instead of where they might have otherwise gone. The same can be said for any business.
Increasing exposure is the point. If this can be accomplished with no money up front(unlike traditional marketing) and with guaranteed usage(unlike print coupons)the business comes out ahead.
Re: Why Groupon hurts businesses and you should be careful
#20The idea that providing a deal or deep discount will somehow reveal your price points, making people demand product at that price is ludicrous. When a business structures a deal of this nature they are doing so with their bottom line in mind, and should know that whatever money they recoup from selling the deal will at least cover their costs. The main idea behind running these deals is to get new business in your do…
and should know that whatever money they recoup from selling the deal will at least cover their costs.
I'm not sure if this is possible with Groupon. Between a discount good enough to be accepted and Groupon's cut taken out you'd have to be running an extremely high margin business to still cover costs.