groupon

bronzedg

I have recently seen a lot of things for sale on groupon & just wondered if anyone knew the rough costings they ask for & is it really worth it ?

mlp

Yes we have used their "services"... once!

Generally, whatever price the deal is advertised at, it's a 50/50 split with Groupon.

That's on top of them wanting a minimum of 60% discount off the retail price.

It might work for you.... they point out that it's good for businesses that can up-sell once the customer is on the premises - or where a business can build repeat business.

Depending on your city will depend on how much they are looking to sell. For example, to be deal of the day on Cardiff, they were looking to hit revenue target of £10k (in 24 hours). £2k for a side-deal. No comeback if the target was missed, but obviously they're only interested in you if they think you'll hit the target.

pitkin2020

They also have a nasty habit of over selling which does your business no favours when you can't complete on every sale, the custy doesn't blame groupon, just the business which can have a negative effect on your reputation.

Savvy_Sue

That comment about overselling: it's not just the impact it has on your 'new' customers, it's also the effect it has on your existing and regular customers.

At my gym I heard someone comment to the staff on how crowded it had been in the pool / spa. The response was that it would get better soon because there had been a lot of uptake of a groupon offer. Well, there are other gyms, and this one doesn't have a long notice period!

paulwf

Another thing to remember is Groupon take all the money from any vouchers not redeemed. This is significant because traditionally with vouchers you can rely on a certain non-redemption rate to get some money back but not with Groupon.

There are endless horror stories about businesses using Groupon, whilst I've never used it myself I'm not going to take the risk. Generally what I find when doing really big offers is it brings in the type of customer that you can't upsell. By all means try it but if you're doing 60% off and only getting half of that (so 30%) I personally couldn't be bothered.

ukbill69

Groupon, is only to be used if 1 you want to try and go out of business, 2 customers are never going to buy your other high priced products e.g. up sell, as they are bargain hunters.

Acc72

Groupon may be good for the customer, but certainly not for the business.

As mentioned earlier, after you have reduced the price of your product/service, and Groupon have taken their cut you are effectively offering your product/service for approx a quarter to a third of the usual price (unlikely to even cover costs ?).

(I think that the more discount you offer, the more Groupon "promote" the offer).

This just attracts the type of customer who has no loyalty and will never return to you (unless it is on another Groupon offer), and you will also alienate your regular "full paying" customers at the same time.

sujman

I am a regular groupon customer/buyer of deals.

As mentioned, there is little incentive for me to become a loyal customer, simply becuase I am a bargain hunter and there is always a new offer for a similar product on elsewhere.

So even if the service is great, would I really pay 250%+ more than the offer price I got the deal for?

If I was a more "upscale" consumer, looking for that high levels of customer service and willing to pay for it, I would never consider using groupon. I would suspect the same is true for many groupon buyers. Obviosuly this comment is relevant to those products / services on offer that require some levels of service. Where you are buying a simple product (furniture, watches, toys etc), I am sure even the rich like a bargain!

I have noticed however, that there are a number of companies that have re-advertised several times (hairdressers / go-karting venues etc).

I can only speculate that for them, despite the significant reduction in revenue per customer, the increased numbers of customers more than offsets, resulting in a net increase to their bottom line.

Glorious

I bought a deal through ItIsOn for a physiotherapy session which I used last week. The physio mentioed that ItIsOn is a better rate for suppliers (35% to ItIsOn rather than 50% to Groupon) so you may want to look into that. I know ItIsOn is only in certain cities, but best of luck with it.

pitkin2020

Groupon will always favour the customer, thats their business model!!

You have decide how it will impact your business positively and negatively. I can not see why any small business would use it unless they already have 2-300% mark up on products/services and could afford to still make a tidy profit.

From the business point of view groupon is merely a very expensive advertising tool. If you have a service that is being aimed at say 1000 people, the service originally costs £100 but after groupon is going to £40 its cost you £60,000 to advertise to 1000 people, before groupon take a cut!. Also each of those new customers will have cost £60 per person to get through the door. Thats a lot of money, a radio advert that would reach far more isn't going to be that much, you could even get a local television advert for that sort of money.

Risk to reward!!!