Why Groupon Sucks for Merchants and LivingSocial Doesn't • Hacker News Board

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

#11

Post by kariatx » Fri, Apr 22, 2011, 1:42 AM UTC

GregBuchholz wrote: post #5

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?

I've done some research on this since Groupon doesn't release the redemption statistics. 20-30% breakage (non-redemption) seems to be the estimate, but some people go as low as 10% and as high as 40% in their estimates.

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

#12

Post by Cherian_Abraham » Fri, Apr 22, 2011, 1:43 AM UTC

IMHO, this is what I would wish for either Groupon or LivingSocial to do. Instead of just throwing it back on to the business once the groupons are sold, be involved beyond that point. Infact, know which customers fit in to that top 5% who actually consistently spend beyond the value of the groupon. Those are the customers that you would want to refer to your clients. If there was a feedback loop back from the businesses back to Groupon or Living Social, then they could curate this list of customers and either start targeting them with better deals or charge more for businesses to get access to those customers. This way, Groupon/LivingSocial has a list of customers that are highly desirable for local businesses to reach, and businesses have a steady roster of customers who dont stiff them on these deals.

I am sure this can be done. Just not sure whether either of these two know how to do it.

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

#13

Post by joeguilmette » Fri, Apr 22, 2011, 1:57 AM UTC

GregBuchholz wrote: post #5

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?

Ours was a good 30%

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

#14

Post by joezydeco » Fri, Apr 22, 2011, 2:04 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)?

3) The customers might not be different, but they're also not as locked into the product as in the case of a spa or hotel.

You can send a burger back and say "I changed my mind, I want the filet mignon." Not as easy to stop a prepaid pedicure halfway and say "can I have the facial instead?", or walk out of a hotel at midnight and ask to be relocated to the Fairmont down the street.

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

#15

Post by [deleted] » Fri, Apr 22, 2011, 2:05 AM UTC

GregBuchholz wrote: post #5

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?

[deleted]

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

#16

Post by clistctrl » Fri, Apr 22, 2011, 2:06 AM UTC

Prediction: Groupon will eventually become old news, and irrelevant. A "Copy-Cat" will focus on developing a customer base consisting of quality niche customers, and become the dominate player.

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

#17

Post by spontaneus » Fri, Apr 22, 2011, 2:31 AM UTC

jprobert wrote: post #8

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 complem…

You couldn't even put the http:// in your spam post for your link? Fail.

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

#18

Post by Gaussian » Fri, Apr 22, 2011, 2:35 AM UTC

GregBuchholz wrote: post #5

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?

The number quoted by Groupon to vendors is 15%.

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

#19

Post by Gaussian » Fri, Apr 22, 2011, 2:36 AM UTC

itswindy wrote: post #3

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

Definitely a serious ramp up going on here. We'll see if they can hold their ground.

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

#20

Post by tribe9 » Fri, Apr 22, 2011, 2:39 AM UTC

Dealing with groupons sounds about as bad as dealing with Yahoo Search Marketing