Why Groupon Sucks for Merchants and LivingSocial Doesn't

#1

Post by venturelevel » Thu, Apr 21, 2011, 10:07 PM UTC

Why Groupon Sucks for Merchants and LivingSocial Doesn't
venturelevel.com

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#2

Post by aresant » Thu, Apr 21, 2011, 10:57 PM UTC

Longish article, summary:

- Restaurateur tests both Groupon / Living social

- Groupon only phone solicitations, unresolved issues after a month vs. LivingSocial took time for in-person rep visit, excellent merchant service.

- Groupon at 50/50 split, LivingSocial 60/40 in merchant favor

- LivingSocial charges no CC fees, Groupon charges 2.5%

- Non-scientific "LivingSocial customers [have] a little more IQ it seems [than Groupon]."

- Merchant concludes LivingSocial taking more of a Zappos approach to stand out, and is succeeding.

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#3

Post by itswindy » Thu, Apr 21, 2011, 11:09 PM UTC

Groupon will drop the fees as soon as their shine fades. For now they need to show revenues and profits to fool the suckers to the tune of $15-$20 Billion

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#4

Post by r00fus » Thu, Apr 21, 2011, 11:37 PM UTC

Several questions spring to mind:

1) What kind of impact is had by running first a Groupon, then a LivingSocial deal in rapid succession?

2) Is it possible that the merchant just got a bad Groupon representative (ie, is that service representative of Groupon's interactions)?

3) Are the customers of QSR (ie, fastfood) group-deals different than those of higher end services (ie, day spa, hotel)?

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#5

Post by GregBuchholz » Fri, Apr 22, 2011, 12:10 AM UTC

What I've never heard is the redemption rate on those coupons. Do 100% of the buyers use them before the expiration date? Or do those count as super-awesome customers who gave up money and got nothing in return?

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#6

Post by rudiger » Fri, Apr 22, 2011, 12:27 AM UTC

aresant wrote: post #2

Longish article, summary: - Restaurateur tests both Groupon / Living social - Groupon only phone solicitations, unresolved issues after a month vs. LivingSocial took time for in-person rep visit, excellent merchant service. - Groupon at 50/50 split, LivingSocial 60/40 in merchant favor - LivingSocial charges no CC fees, Groupon charges 2.5% - Non-scientific "LivingSocial customers [have] a little more IQ it seems [th…

It's worth reading, in my opinion.

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#7

Post by T_S_ » Fri, Apr 22, 2011, 12:45 AM UTC

Good user report.

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#8

Post by jprobert » Fri, Apr 22, 2011, 12:51 AM UTC

Some great points in the article and I agree that Livingsocial is better all around than Groupon, not only from a merchant perspective but also with innovation and creativity in the group buying space.

At the same time I believe that daily deals are unsustainable for the large crowd that is out there. Groupon and living social will survive but many will die. My company is providing an innovative solution that complements daily deals and is another good source for marketing.

At Zooyan.com we are creating a marketplace for deals where people can go and search for or browse 100s of ongoing offers near them. All of the offers last on average for 6 months and provide similar discounts to daily deals. We allow customers the ability to buy what they want, when they want it and we allow merchants to have a long term marketing source that provides consistent and manageable sales. I'd love to know what others think. Www.zooyan.com

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#9

Post by trobertson » Fri, Apr 22, 2011, 12:54 AM UTC

r00fus wrote: post #4

Several questions spring to mind: 1) What kind of impact is had by running first a Groupon, then a LivingSocial deal in rapid succession? 2) Is it possible that the merchant just got a bad Groupon representative (ie, is that service representative of Groupon's interactions)? 3) Are the customers of QSR (ie, fastfood) group-deals different than those of higher end services (ie, day spa, hotel)?

In regards to 2, the author mentions the same concern, and a possible reason for the difference in service, way at the end:

> Or maybe my account rep with Groupon is just to blame? Perhaps Groupon grew too big, too fast, to consider the value of communication and treatment with merchants...

Re: Why Groupon Sucks for Merchants and LivingSocial Doesn't

#10

Post by asr » Fri, Apr 22, 2011, 1:07 AM UTC

aresant wrote: post #2

Longish article, summary: - Restaurateur tests both Groupon / Living social - Groupon only phone solicitations, unresolved issues after a month vs. LivingSocial took time for in-person rep visit, excellent merchant service. - Groupon at 50/50 split, LivingSocial 60/40 in merchant favor - LivingSocial charges no CC fees, Groupon charges 2.5% - Non-scientific "LivingSocial customers [have] a little more IQ it seems [th…

Thanks, this summary is a useful recap.

I think a lot of this article is colored by the author's positive experience with his LivingSocial rep and negative experience with his Groupon rep, which may be just the reps he was working with. And, reading between the lines, it sounds like his impression of Groupon customers was created largely by one problem customer (could be a couple, but not many).

Of course this tells you something, but to use an overused phrase it's "just one datapoint."

It is, though, an interesting datapoint... I'm curious if this is truly a general trend.