Groupon is not for my small business.
What’s the deal with Groupon? You would think it’s the be all and end all in coupon deals. From what I understand the concept is quite simple. If your a business you give Groupon half the money from the coupon deal, effectively loosing or making no money on the deal item. In exchange a lot of traffic flow comes from people who have bought your merchandise for half it’s price. The supposed up tick for the merchant is you get a lot of people who may have never walked through your doors before. Maybe, just maybe they will like what they see and buy other things that you can make a little money on. The other hope is they will be so astounded by your store they can’t wait to come back without coupons, and buy your stuff at the regular price.
How is this any different than the old days when you would run an ad in the paper offering crazy low prices on loss leaders? I realize it has the modern twist of being on The Internet, and so many people have to buy the coupons before they kick in. One reviewer at sitejabber.com say’s she loves it and, “if it’s a restaurant you frequent, you may want to buy more than one and use it on different visits. double check the expiration date, it’s usually good for about a year, but they vary depending on each deal.” This lady already frequents the restaurant, so she is not a new customer. Imagine owning that restaurant and seeing her come in with her half priced coupons. “Yea, another meal served at no profit. Wonder how many more coupons she has?” Another person who love’s Groupon say’s, “just got back from White Water Raftng at half the cost the others in our boat paid.” I wonder if he told the others on the raft what a great deal he got? I wonder who the rafting company owner want’s to have come back on the rafting trip next time? Likely the people who paid full price and supported the business so it can stay in business. I love this one, “I’ve gotten 50% off The Melting Pot (still my favorite, I hope that coupon comes around again soon), a super cheap massage, and tickets to a wine tasting. Another time, I was just about to buy a membership to my local yoga studio, when I got a Groupon offering 60% off to that very same studio! I spent $45 instead of $108.” I am sure the yogo studio is jumping for joy with the realization that you we’re going to join at full price, but are now joining at half. Another reviewer say’s, “so far I have bought and used 3 groupons: One for a chemical peel facial that was fantastic and half price. One for cupcakes that were expensive but got to try them cause of groupon. I would not rush out for the cupcakes again, but they were better than I have made so far.” I am sure the cupcake maker is thrilled you came into their store to get half priced cupcakes you’ll never buy again.
As a customer I can certainly see where paying less than half the price for something is exciting. I just wonder why businesses still think this is the way to long term customers? One reviewer say’s, “legit merchants that have confidence in the value of what they are doing… cut their profit because they are optimistic you will like and be back!” Why don’t those same merchants have confidence you will be back because they sell great stuff at a reasonable price all the time? They’re only legit because they need a half price deal to get you into their store the first place?
My aversion to Groupon is not from the customers standpoint. If you get a deal to go to that garden center and get $50 off of $100 in merchandise then great! If your that garden center what is it about your store that requires that you give away stuff to get customers? These same customers would never have walked in just because you have really great stuff and charge a reasonable price for it?
I have always been a contrarian when it comes to the current fad. It would seem the majority of users like Groupon, and for some businesses it seems to work for them. Here is an article from Inc.com on Groupon. Loved this high rated comment, “Make no mistake, Groupon works for Groupon first and foremost. And it works for customers. What it doesn’t work profitabily for is small business! Most tales of success are anecdotal, built on ‘hope’ at how a brand is able to attract new customers…You want more customers? Of course you do! Find out why the ones shopping with you don’t come back first, fix that, reward them and you’ll really make your small business work.” What a novel idea!