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Tell HN: Our experience with Groupon

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Re: Tell HN: Our experience with Groupon

#31

Post by joeguilmette »

andrewljohnson wrote: post #29

I am glad it worked out for you, but I find the practice of raising prices so you can claim a discount to be abhorrent - I hope businesses don't do it to me more than I think. This is the same scam that happens in every mall jewelry store. I guess the big question is did you make the price increase "to all customers" permanent, or is that part of the Groupon song and dance? If you just do it during Groupons, then whi…

The 10k is still $169, is in effect for all customers, and is advertised as such on our site.

We wanted to boost T-Shirt sales so we raised shirt prices $5 and then gave everyone a $5 off coupon. It worked like a charm, and nothing is nefarious about that, is it?

Re: Tell HN: Our experience with Groupon

#32

Post by andrewljohnson »

joeguilmette wrote: post #31
andrewljohnson wrote: post #29

I am glad it worked out for you, but I find the practice of raising prices so you can claim a discount to be abhorrent - I hope businesses don't do it to me more than I think. This is the same scam that happens in every mall jewelry store. I guess the big question is did you make the price increase "to all customers" permanent, or is that part of the Groupon song and dance? If you just do it during Groupons, then whi…

The 10k is still $169, is in effect for all customers, and is advertised as such on our site. We wanted to boost T-Shirt sales so we raised shirt prices $5 and then gave everyone a $5 off coupon. It worked like a charm, and nothing is nefarious about that, is it?

I think if the overall price increase is permanent then it is indeed not deceptive on your part... totally fine by me at least.

On the other hand, if that's what it takes for a business to use Groupon effectively, then that makes me question Groupon's long-term value to consumers.

EDIT: Here, I made a picture. Is this good for me as a buyer of things? http://i.imgur.com/zJrxw.jpg

Re: Tell HN: Our experience with Groupon

#33

Post by joeguilmette »

joeguilmette wrote: post #31
andrewljohnson wrote: post #29

I am glad it worked out for you, but I find the practice of raising prices so you can claim a discount to be abhorrent - I hope businesses don't do it to me more than I think. This is the same scam that happens in every mall jewelry store. I guess the big question is did you make the price increase "to all customers" permanent, or is that part of the Groupon song and dance? If you just do it during Groupons, then whi…

The 10k is still $169, is in effect for all customers, and is advertised as such on our site. We wanted to boost T-Shirt sales so we raised shirt prices $5 and then gave everyone a $5 off coupon. It worked like a charm, and nothing is nefarious about that, is it?

So maybe the $99 jump is as big of a deal as it sounds like - but assuming they go into the funnel that we want them to:

-buy a $99 weekday only 10k jump -reserve a weekend, upgrade to 15k for an additional $30

they are getting a $199 product for $129. still a GREAT deal.

Re: Tell HN: Our experience with Groupon

#34

Post by geekfactor »

That said, I feel that all of the Groupon horror stories floating around are from businesses that would be in trouble regardless.

I would love to find out that your experience is more typical for Groupon customers, but it strikes me that there is a bit of selection bias at play here. The fact that you are posting this on HN, with 3 years/700+ karma here, suggests you might take a more analytical approach to assessing the Groupon opportunity and building a business model to make it work for you. I doubt this is typical of the small B&M business owner that Groupon sells to.

Congratulations, though, on your success and thanks for the write-up.

Re: Tell HN: Our experience with Groupon

#35

Post by neovive »

Very interesting. Most of the Groupon customer stories I have read thus far are from lower-margin merchants such as restaurants. Since Groupon customers likely skip the upsells (wine, appetizers and desserts), restaurants seem to be less positive about their experience in general. They need to focus more on converting Groupons into returning (full price) customers to generate positive returns.

Re: Tell HN: Our experience with Groupon

#36

Post by joeguilmette »

neovive wrote: post #35

Very interesting. Most of the Groupon customer stories I have read thus far are from lower-margin merchants such as restaurants. Since Groupon customers likely skip the upsells (wine, appetizers and desserts), restaurants seem to be less positive about their experience in general. They need to focus more on converting Groupons into returning (full price) customers to generate positive returns.

It baffles me. I went through Trubates the other day. Bought two $8 coupons for $20 of food, limit two per table (!).

Spent $16 for a feast. Why would I upgrade? However, had it been limit 1 per table, only applied to appetizers, had a 1 drink minimum, or was only available weekdays, it would've worked out better for the merchant.

As it was they structured the deal so there was NO WAY I'd upgrade.

Re: Tell HN: Our experience with Groupon

#37

Post by mmaunder »

joeguilmette wrote: post #17
patio11 wrote: post #2

Thank you for writing this. Edit to add value: "Same-day" special + email list of people with confirmed willingness to pay money and get pushed out of a perfectly good airplane = a win. Presumably your costs are pretty much fixed after making the decision to do a jump, so you could hit that mailing list with a special promotion multiple times per year. It's a Tuesday, congratulations, have 20% off if we push you out…

Thats exactly what we do! Basically run our own Groupons. Send out an email with a link to a hidden page on our site that will be up for a week. We generally do it in the winter just before Christmas. Lots of sales as gifts, and since it's winter they will wait a few months to jump which will raise breakage, and hence the margin.

Joe just wanted to echo patio on thanking you. With all the breathless negative press Groupon is receiving post the S-1 IPO filing, it's tough to gauge what the reality is. Thanks for the informative post!

Re: Tell HN: Our experience with Groupon

#38

Post by joeguilmette »

geekfactor wrote: post #34

That said, I feel that all of the Groupon horror stories floating around are from businesses that would be in trouble regardless. I would love to find out that your experience is more typical for Groupon customers, but it strikes me that there is a bit of selection bias at play here. The fact that you are posting this on HN, with 3 years/700+ karma here, suggests you might take a more analytical approach to assessing…

My karma was around 550 before this post :)

I went into this management position with zero management experience. If I am at the top end of small business management then we're all doomed. I honestly feel that every single one of these Groupon horror stories are from careless, dare I say stupid, business owners. You see them all the time. How many buildings have you seen cycle through restaurants every 8 months?

One of these businesses happens to run a Groupon and then it's Groupon's fault they went out of business.

Re: Tell HN: Our experience with Groupon

#39

Post by theatrus2 »

andrewljohnson wrote: post #32
joeguilmette wrote: post #31

Earlier quoted context omitted.

The 10k is still $169, is in effect for all customers, and is advertised as such on our site. We wanted to boost T-Shirt sales so we raised shirt prices $5 and then gave everyone a $5 off coupon. It worked like a charm, and nothing is nefarious about that, is it?

I think if the overall price increase is permanent then it is indeed not deceptive on your part... totally fine by me at least. On the other hand, if that's what it takes for a business to use Groupon effectively, then that makes me question Groupon's long-term value to consumers. EDIT: Here, I made a picture. Is this good for me as a buyer of things? http://i.imgur.com/zJrxw.jpg

Its nothing new to Groupon. Its a classic retail strategy - have sales or discounts on a continuous basis. In effect, many people do not pay the high-margin MSRP price.

Re: Tell HN: Our experience with Groupon

#40

Post by joeguilmette »

mmaunder wrote: post #37
joeguilmette wrote: post #17

Earlier quoted context omitted.

Thats exactly what we do! Basically run our own Groupons. Send out an email with a link to a hidden page on our site that will be up for a week. We generally do it in the winter just before Christmas. Lots of sales as gifts, and since it's winter they will wait a few months to jump which will raise breakage, and hence the margin.

Joe just wanted to echo patio on thanking you. With all the breathless negative press Groupon is receiving post the S-1 IPO filing, it's tough to gauge what the reality is. Thanks for the informative post!

I can't speak for Groupon's financials (that S-1 is horrifying), but the other end of it can work quite nicely :)

It looks like Grouponomics applies to Groupon itself!

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