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Groupon Closes the Redemption Loop With Loyalty Rewards

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Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#11

Post by austincav »

jasonwilk wrote: post #6

This is Groupon's best product to date. I don't know about everyone else on HN, but I feel like a good majority of people I know have at least bought one Groupon by now, where their credit card is stored. To take that major advantage and apply frictionless rewards for users, is recipe for major disruption. Checking in to a place on Facebook and FSQ is almost entirely useless for a small business. They need $$$, not s…

Why is it their best product? Applying an idea at scale is strategic, not necessarily innovative. For example:

- Bloomspot's $40M raise and accompanying shift in focus (http://www.bloomspot.com/media/assets/Bloomspot_Marketing_Ki...)

- Swipely, Offermatic, etc.

- GRS, a vendor of this data (http://www.grsgroup.com/)

- Also, dozens of similar ideas such as Amex using FB data: http://www.forbes.com/sites/moneybuilder/2011/07/20/link-lik...

The pricing on this is not particularly attractive to merchants, especially small ones.

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#13

Post by Woost »

sunchild wrote: post #9
jasonwilk wrote: post #6

This is Groupon's best product to date. I don't know about everyone else on HN, but I feel like a good majority of people I know have at least bought one Groupon by now, where their credit card is stored. To take that major advantage and apply frictionless rewards for users, is recipe for major disruption. Checking in to a place on Facebook and FSQ is almost entirely useless for a small business. They need $$$, not s…

Just as all roads in the enterprise lead to email clients, all roads in daily deals lead to loyalty programs. Forgive me for being blunt, but Groupon's move into loyalty programs was basically inevitable, if you really think about their business model. In fact, every merchant-middle-man-operation of any kind will eventually adopt (or join) a loyalty program. That's why you see them at grocery stores, pharmacies, cred…

Can you expand on why you think that is? (not arguing, just curious as to your reasoning)

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#14

Post by Woost »

That article was a little lite on details, does anyone have any idea how groupon will get the details about when you spend money at the merchant? Obviously it's not from the banks, so they must have a deal with merchants. But that deal would require them to modify their point of sale software to support phoning home to groupon. That seems like a tall order for places which have, say, an old filemaker database holding their sales records.

As an aside: Would a merchant really want to turn over all its sales data to groupon?

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#15

Post by callmeed »

Woost wrote: post #14

That article was a little lite on details, does anyone have any idea how groupon will get the details about when you spend money at the merchant? Obviously it's not from the banks, so they must have a deal with merchants. But that deal would require them to modify their point of sale software to support phoning home to groupon. That seems like a tall order for places which have, say, an old filemaker database holding…

I'm guessing but it could be similar to Square's card case

https://squareup.com/cardcase

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#16

Post by kosei »

Great idea, but the biggest problem is that it incentivizes users to pay only with credit cards. For a small restaurant owner or retailer, those bills can go upwards of $10,000-20,000/month, and could be incredibly detrimental for, say a frozen yogurt shop.

Now, the ease of use will be a big part of this (just using your own credit card), and may alleviate some of these troubles for the retailer from a training perspective, but this is yet another potential for business owners to make bad decisions sacrificing long-term profit in exchange for short-term growth.

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#17

Post by austincav »

Woost wrote: post #14

That article was a little lite on details, does anyone have any idea how groupon will get the details about when you spend money at the merchant? Obviously it's not from the banks, so they must have a deal with merchants. But that deal would require them to modify their point of sale software to support phoning home to groupon. That seems like a tall order for places which have, say, an old filemaker database holding…

May answer your question: http://www.quora.com/How-does-Bloomspot-Prime-aggregate-POS-...

Re: Groupon Closes the Redemption Loop With Loyalty Rewards

#18

Post by sunchild »

Woost wrote: post #13
sunchild wrote: post #9

Earlier quoted context omitted.

Just as all roads in the enterprise lead to email clients, all roads in daily deals lead to loyalty programs. Forgive me for being blunt, but Groupon's move into loyalty programs was basically inevitable, if you really think about their business model. In fact, every merchant-middle-man-operation of any kind will eventually adopt (or join) a loyalty program. That's why you see them at grocery stores, pharmacies, cred…

Can you expand on why you think that is? (not arguing, just curious as to your reasoning)

It's structural; a middle-man in the merchant sales cycle presents two fundamental value-add propositions:

1. Eliminate the hassle of finding and dealing with prospective customers,

2. Educate the merchant about customer demographics and preferences.

That latter point is why all "sales broker" business models eventually lead to loyalty programs (which is a euphemism for data collection, volume incentives, and targeted advertising).

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