Amen to hear a voice of reason among all the complainers. Groupon is just another tool available to business owners and when properly used can contribute to the bottom line. No one ever said running a business was easy. No one ever said your vendors should do all your work for you. And it's completely insane that people are now complaining about too many customers? Holy cow what is this world coming to!
That said, I think the jury is still out on how much longevity the daily deals have. I suspect they will eventually take their place next to Sunday coupons as an important but not overwhelming tool for certain types of businesses.
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.
I think it varies greatly... I've heard from at least two restaurant-manager friends that the margins are actually quite low. (I suspect this varies quite a bit based on the "tier" of establishment).
Amen to hear a voice of reason among all the complainers. Groupon is just another tool available to business owners and when properly used can contribute to the bottom line. No one ever said running a business was easy. No one ever said your vendors should do all your work for you. And it's completely insane that people are now complaining about too many customers? Holy cow what is this world coming to! That said, I…
A restaurant etc has a different model from most - they have an absolutely limited possible customer capacity. If popular, they want to work on customer quality, not quantity.
A quality restaurant customer is: part of the right-sized party (comes as a party of 4); orders specials or expensive dishes; raves about the food to friends; has a regular habit; other things I don't know.
Coupons can easily backfire for restaurants, because they pack in low-margin customers, possibly displacing quality customers!
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…
That's a good point. Groupon might be rough on restaurants, but then it seems everything is pretty rough on restaurants.
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?
For people over 200lbs its a big PITA, to the point that a lot of places won't take you if you're over 225. At that point it's hard on the instructor and hard on the gear. At around 250lbs, depending on the weight of the instructor, you come up on the max recommended exit weight. Most everything will still work fine, you just expose yourself to situations where the reserve might, say, explode if you do too many wrong things in a row. We just charge $1 per lbs to the student for everything over 200lbs and give it to the instructor. That way when a 250lbs 5' tall bowling ball of a woman walks in, everyone fights over her :)
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?
It's a bad idea to give a discount to someone who was already going to buy your product at full price. It's an even worse idea to sell them a product and get 25% the revenue you would otherwise.
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 :)
Well that isn't a cool, almost double that haha -- I'm just happy they resist the urge to over work their instructors, however temping in this in-demand situation. Blue Sky's and safety first :)
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.
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…
Free market. If someone thinks x isn't worth $169, but it is worth $169 after 20% off, that's just savvy business. You'll find in marketing, perception is nearly always more important than reality.
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…
They get the coupon before they buy the shirts but after they jump, in their diploma packet. more people buy shirts because of it.