Tell HN: Our experience with Groupon • Hacker News Board

Re: Tell HN: Our experience with Groupon

#51

Post by graupel » Tue, Jun 14, 2011, 11:29 PM UTC

joeguilmette wrote: post #14

pitdesi wrote: post #6

Thanks for this... really interesting. I just went skydiving for the first time last week and used a Groupon. It was fun but I wasn't immediately hooked and wanting to go again. I paid $109 for a 15k jump that is normally $209. I bought it about a year ago (Used it because Groupon was about to expire). The facility was so packed that I had to reserve my time far in advance. (They sold 4,500 groupons the day I bought)…

All instructors (and everyone else, except front end staff) are paid per unit - industry wide. Depending on aircraft it generally costs around $12-20 per seat in the plane. The equipment costs around $15k to buy new is fairly expensive to maintain. Instructors earn anywhere from $25-85 per jump, depending on facility, the weight of the student and whether or not the student bought a handcam video. Also, it generally…

Curious - why does the weight of the student have a bearing on the amount paid to the instructor? Is it harder to work with super light (or super heavy?) people?

Re: Tell HN: Our experience with Groupon

#52

Post by sid0 » Tue, Jun 14, 2011, 11:31 PM UTC

brianr wrote: post #21

joeguilmette wrote: post #4

Earlier quoted context omitted.

Yea we actually lost a few funjumpers because we've been so busy. Used to send 1 flight an hour with 3 tandems with 5-8 solo jumpers. Now we send 2 flights an hour with 5-6 tandems on each flight and around 2-3 funjumpers... :/ It's not always that bad but it is more often than not. How much did you pay for AFF? You're going to be pretty sad when you hear that we do AFF for $999 :)

AFF for $999, eh? Which DZ are you / where are you based?

http://www.1800funjump.com seems to have the same pricing and schedule, and an AFF for $999, so I'm guessing that's the one. A bunch of friends and I were planning to go there for a jump, actually.

Re: Tell HN: Our experience with Groupon

#53

Post by joeguilmette » Tue, Jun 14, 2011, 11:32 PM UTC

panacea wrote: post #50

Your business is perfect for the Groupon firehose attention. I maintain that it doesn't work for restaurants though.

I think it's a lot harder for restaurants to be successful with it and a lot easier for them to be buried by it. That said - it's no excuse for them to run Groupons, get pounded, and then point the finger at Groupon - any more so than they can blame their landlords for charging high rent, or their employees for being expensive, or for Comcast charging so much for TV ads.

No one is making them run Groupons and no one is lying about what to expect when you run a Groupon.

Re: Tell HN: Our experience with Groupon

#54

Post by pbreit » Tue, Jun 14, 2011, 11:42 PM UTC

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.

Restaurants have very high gross margins (food is only about 30% of a restaurant's costs) which is why Groupons can actually be really good for them. It is absolutely critical for restaurants to fill seats.

Re: Tell HN: Our experience with Groupon

#55

Post by pbreit » Tue, Jun 14, 2011, 11:44 PM UTC

riams wrote: post #20

How high was cannibalization, i.e. existing customers using the Groupon deal instead of paying full price?

Since when is it a bad idea to give discounts to existing customers?

Re: Tell HN: Our experience with Groupon

#56

Post by pbreit » Tue, Jun 14, 2011, 11:47 PM UTC

panacea wrote: post #50

Your business is perfect for the Groupon firehose attention. I maintain that it doesn't work for restaurants though.

Why not? Restaurant have high gross margins so incremental customers are gold. Every empty seat is lost revenue that can never be found. The chef, waiters, landlord, etc all get paid no matter how many diners walk in.

Re: Tell HN: Our experience with Groupon

#57

Post by pbreit » Tue, Jun 14, 2011, 11:49 PM UTC

benatkin wrote: post #12

> That said, I feel that all of the Groupon horror stories floating around are from businesses that would be in trouble regardless. First, you had it right in the sentence prior to this one. Your experience is enough of an outlier that it doesn't apply to most Groupon experiences. Second, isn't Groupon supposed to help businesses that are in trouble?

Probably the opposite on both counts. Groupon is best for savvy business owners who know how to profit from an influx of customers. And there's no reason to suggest that successful Groupon usage is rare. We only hear about the complaints, not the thousands upon thousands of successes.

Re: Tell HN: Our experience with Groupon

#58

Post by [deleted] » Tue, Jun 14, 2011, 11:49 PM UTC

joeguilmette wrote: post #28

tatsuke95 wrote: post #23

Thanks for writing this up. Not much positive coming from the Groupon front of late. That said: > In advance of the Groupon we raised our 10k price to $169 so that the discount percentage was higher. I think most people assumed this was happening, but to have it said in plain English is a bit disturbing. It's deliberately deceiving the customer, and is accepted as a strategy. Is that sustainable?

It's not deliberately deceiving anyone. We raised our price and then offered a discount. The price was raised for all customers. It is entirely different than forcing Groupon customers to order from a separate menu with similar products and higher prices, or funneling them through a website with an online store with the same products and higher prices. We just modified our pricing in advance of changing our business…

[deleted]

Re: Tell HN: Our experience with Groupon

#59

Post by pbhjpbhj » Tue, Jun 14, 2011, 11:50 PM UTC

joeguilmette wrote: post #42

randall wrote: post #41

Earlier quoted context omitted.

Curiously, do you ever sell any shirts w/o a coupon? I mean literally, not figuratively, have you sold 1 w/o a coupon?

The prices listed on everything is inflated $5, but we don't even bother 'redeeming' the coupons, the prices are just $5 lower in the computer. We really don't care, we just want people to feel like they're getting a deal and to think harder about looking at the shirts and buying one. We also spent a lot of time and money making them cool, attractive and well made.

>we just want people to feel like they're getting a deal and to think harder about looking at the shirts and buying one.

So you get them to commit to spending the full amount, come to the till cash-in-hand and then you let them walk away with the extra $5?

What do you do with them then? Is there a "reserve your next discount drop for only $5" deal or something?

It looks like you did price differentiation then failed to complete on those that can afford the higher price.

Re: Tell HN: Our experience with Groupon

#60

Post by sh1mmer » Tue, Jun 14, 2011, 11:52 PM UTC

This fall exactly into my thinking about Groupon Economics.

#1 this is not a commodity business like say food #2 customers that purchase because it's a discount wouldn't be likely to purchase otherwise, and it's hard for them to find another supplier #3 treating groupon as a way to bag 1st time customers and then treating them specifically as customers that _need_ upsell is the way to create repeat business

Since people are paying for entertainment, specifically something non-typical and hobby-like it works. Especially because this business took the effort to create conversion and up-sell opportunities.