The BBC asks if daily deal sites have had their day? • Hacker News Board

Re: The BBC asks if daily deal sites have had their day?

#11

Post by jmj4 » Fri, Nov 04, 2011, 1:39 PM UTC

yuvadam wrote: post #9

jmj4 wrote: post #8

I think a lot of people misunderstand what Groupon offers a business. Basically it's advertising, but in a way that makes it affordable for small businesses. The company offering their deal, is putting their name out there, and only has to pay for it when someone walks through the door an makes a purchase. Tradition advertising means paying for your brand to be seen. Magazines, newspapers, ect can target markets, but…

It would have been advertising if it had a longlasting effect. Consider that once you do a groupon for a 20% very hard to get that customer again for the full price of the product. So what do you get from the supposed advertisement? A single customer that may or may not give you his business again. That's not advertising. That's what's crassly known as 'opening your legs'.

Well, sometime in the sense that your getting your product/service featured in thousands of people inbox's, it is advertising. It's just disguised, and your right, often the people buying are bargain hunters, but some of them come back.

>What do you get from this supposed advertisement? A single customer that may or may not give you his business again.

What do you get from traditional print advertising? Your brand seen by people, nothing more. At least with Groupon you get them through the door.

Re: The BBC asks if daily deal sites have had their day?

#12

Post by Tyrannosaurs » Fri, Nov 04, 2011, 1:46 PM UTC

jgroome wrote: post #7

ra wrote: post #4

Earlier quoted context omitted.

Groupon and their clones are basically the equivalent of coupons on the back of a supermarket receipt. Nothing new here.... but it has been very profitable.

...for Groupon! Not so much the retailers though.

Not for Groupon (which loses money) but some of it's investors have done OK out of it - so far.

Re: The BBC asks if daily deal sites have had their day?

#13

Post by sabret00the » Fri, Nov 04, 2011, 2:03 PM UTC

jgroome wrote: post #7

ra wrote: post #4

Earlier quoted context omitted.

Groupon and their clones are basically the equivalent of coupons on the back of a supermarket receipt. Nothing new here.... but it has been very profitable.

...for Groupon! Not so much the retailers though.

Isn't it the other way round? Groupon seems to believe that due to the name recognition, they'll become profitable at some point, and even then the business model is heavily reliant on the IPO. The retailers are drumming up a ton of business though.

Re: The BBC asks if daily deal sites have had their day?

#14

Post by AznHisoka » Fri, Nov 04, 2011, 2:08 PM UTC

yuvadam wrote: post #9

jmj4 wrote: post #8

I think a lot of people misunderstand what Groupon offers a business. Basically it's advertising, but in a way that makes it affordable for small businesses. The company offering their deal, is putting their name out there, and only has to pay for it when someone walks through the door an makes a purchase. Tradition advertising means paying for your brand to be seen. Magazines, newspapers, ect can target markets, but…

It would have been advertising if it had a longlasting effect. Consider that once you do a groupon for a 20% very hard to get that customer again for the full price of the product. So what do you get from the supposed advertisement? A single customer that may or may not give you his business again. That's not advertising. That's what's crassly known as 'opening your legs'.

That's exactly what advertising is. You're paying for exposure and a chance that you can convert him to a lifetime customer. You can say the exact same thing about Adwords, and display advertising. You pay for each click that may or may not give you a single sale, let alone a lifetime customer. You pay for an impression that may not influence a customer's buying decision in the future...

Groupon may be a bad form of advertising for most businesses.. but it's still advertising.

Re: The BBC asks if daily deal sites have had their day?

#15

Post by yuvadam » Fri, Nov 04, 2011, 2:20 PM UTC

AznHisoka wrote: post #14

yuvadam wrote: post #9

Earlier quoted context omitted.

It would have been advertising if it had a longlasting effect. Consider that once you do a groupon for a 20% very hard to get that customer again for the full price of the product. So what do you get from the supposed advertisement? A single customer that may or may not give you his business again. That's not advertising. That's what's crassly known as 'opening your legs'.

That's exactly what advertising is. You're paying for exposure and a chance that you can convert him to a lifetime customer. You can say the exact same thing about Adwords, and display advertising. You pay for each click that may or may not give you a single sale, let alone a lifetime customer. You pay for an impression that may not influence a customer's buying decision in the future... Groupon may be a bad form of…

You are absolutely correct. But Groupon doesn't give that impression. The impression you get from a Groupon is "I got this really good deal for $10, why would I want to return for $20?"

In a classic ad the full price is stated upfront. You convert your customers on that, not on a completely unsustainable one-time deal.

Re: The BBC asks if daily deal sites have had their day?

#16

Post by cletus » Fri, Nov 04, 2011, 2:35 PM UTC

jmj4 wrote: post #8

I think a lot of people misunderstand what Groupon offers a business. Basically it's advertising, but in a way that makes it affordable for small businesses. The company offering their deal, is putting their name out there, and only has to pay for it when someone walks through the door an makes a purchase. Tradition advertising means paying for your brand to be seen. Magazines, newspapers, ect can target markets, but…

Treating GroupOn (and similar costs) as advertising/marketing is indeed the correct approach and certainly one the company pitches.

However, something worth considering: is the GroupOn audience worth buying? Anecdotally the answer seems to be "no" as repeat business is well below expectations, regular customers use the coupons, customers will use coupons at times when you'd otherwise be busy and the typical profile of the GroupOn customer suggests they tend to spend the absolute minimum for the coupon.

Honestly I'm shocked the GroupOn IPO is oversubscribed. Still, probably not bad for an opening day sell.

Re: The BBC asks if daily deal sites have had their day?

#17

Post by AznHisoka » Fri, Nov 04, 2011, 2:37 PM UTC

yuvadam wrote: post #15

AznHisoka wrote: post #14

Earlier quoted context omitted.

That's exactly what advertising is. You're paying for exposure and a chance that you can convert him to a lifetime customer. You can say the exact same thing about Adwords, and display advertising. You pay for each click that may or may not give you a single sale, let alone a lifetime customer. You pay for an impression that may not influence a customer's buying decision in the future... Groupon may be a bad form of…

You are absolutely correct. But Groupon doesn't give that impression. The impression you get from a Groupon is "I got this really good deal for $10, why would I want to return for $20?" In a classic ad the full price is stated upfront. You convert your customers on that, not on a completely unsustainable one-time deal.

Yep, you are right. It dilutes your brand. It's a reason why most luxury brands like Prada and Louis Vuitton stay away from flash sites like Gilt and RueLaLa as well. It's also why Apple rarely has sales on iPods or iPhones.

By giving out discounts, you're training people to expect deals forever, and that's unsustainable.

Re: The BBC asks if daily deal sites have had their day?

#18

Post by [deleted] » Fri, Nov 04, 2011, 2:40 PM UTC

acangiano wrote: post #6

gaustin wrote: post #5

From TFA: 'a [GroupOn] spokesperson said it was "difficult to give an accurate figure" for how many businesses are repeat users of the site.' Really? I would have thought it would be pretty easy to run a query on their accounts and find out a nearly exact number.

I think it's one of these situations where it's not difficult to calculate, but it's difficult for them to release the figure. I suspect it would clearly indicate the malcontent of small businesses. "0.5% are repeat users" doesn't really bode well for you if your company is looking at an IPO.

[deleted]

Re: The BBC asks if daily deal sites have had their day?

#19

Post by sanj » Fri, Nov 04, 2011, 2:45 PM UTC

What I would like is the anti-Groupon.

Right now, every time I see a place that I currently frequent show up on Groupon I cringe. It means that my favorite restaurant or coffeeshop is going to be mobbed by cheapskates looking to save a few bucks. It means that the staff is going to be harried and tired. It means that I won't be able to get a reservation for a few months.

I want a way for these places to say "Hey -- regulars! We love you! Come back and spend time here so that we can avoid daily deals. We'll be happier and so will you!"

Re: The BBC asks if daily deal sites have had their day?

#20

Post by pavel_lishin » Fri, Nov 04, 2011, 3:01 PM UTC

sanj wrote: post #19

What I would like is the anti-Groupon. Right now, every time I see a place that I currently frequent show up on Groupon I cringe. It means that my favorite restaurant or coffeeshop is going to be mobbed by cheapskates looking to save a few bucks. It means that the staff is going to be harried and tired. It means that I won't be able to get a reservation for a few months. I want a way for these places to say "Hey -- r…

If you're a regular, aren't loyalty cards - you know, hole-punch-tracked rewards, etc. - enough? How much web connectivity do you need from a place that you actually frequent?