7 ms·

But shouldn't Groupon just be a marketing expense? I'm not saying that the company should be ok losing money all the time, but it's common for companies to spen

by zck 11y ago

But shouldn't Groupon just be a marketing expense? I'm not saying that the company should be ok losing money all the time, but it's common for companies to spend money to acquire customers. Do you avoid all "new customer" deals? It seems like companies on Groupon, for whatever reason, often offer way more of a discount than they're comfortable with. I wonder why that is.

RyanZAG 11y ago
It's not always the company. In the case of the USA and their insane tipping customs, a customer coming in with groupon specials is going to end up tipping less. Since the whole service at USA restaurants is based around tipping, the employees know they won't really get tipped well so they're very customer hostile.
- BashiBazouk 11y ago
  Maybe that's an upside. If the wait staff loses it's professionalism that easily, it tells me something about the restaurant...
- imgabe 11y ago
  I'm sure a lot of people do that, but the appropriate etiquette when using a coupon at a restaurant is to tip on the full price. Most adults who frequent restaurants should know that.
  - RyanZAG 11y ago
    You know that most of the world's population doesn't tip at all? Given that, it seems kind of strange to assume everyone just knows the appropriate tipping etiquette without being told when getting the coupon or sitting down. Plus the most active users of groupon are probably doing it to save as much money as possible with coupons. They're unlikely to willingly throw away those savings on massive tips... and from what you hear about frequent groupon users they really don't tip the price pre-coupon.
    - camdenre 11y ago
      I would guess that he meant to say most "American" adults should know better.
    - imgabe 11y ago
      I was replying to your comment specifically about tipping customs in the US. If you grow up in the US and go to restaurants it's not unreasonable to absorb tipping etiquette along the way. You still save money with a coupon, you're not paying full price for the meal. That's no reason to screw over the server who depends on tips for a living. If someone is seriously strapped for cash and needs to save money, they should be cooking at home, not going to restaurants. Don't get me wrong, I'd happily do away with the whole tipping culture and just have the entire price printed on the menu. But, as long as we have tips, take the time to learn how to do it right.
      - homulilly 11y ago
        I've grown up in america and is the first time I've ever heard this and I imagine I'm not alone. It's also kind of difficult since people factor the tip at the end of the meal when they get the receipt, not when they have a menu in front of them.
        dionidium 11y ago
        I hope you're an exception. Tipping on the full amount should be a fairly well-known practice. Also, your receipt will probably show the original price and the final, discounted price. You shouldn't need to remember the menu.
        bigtunacan 11y ago
        That's a huge assumption. It's something I also have never heard of until reading this post. I'm personally bothered by the entire tipping culture in the US. Once used to acknowledge that someone has gone above and beyond, now it is just used by businesses as a means to pay below minimum wage (which is too low already). The fact that it is also percentage based this means a person working at a restaurant with higher prices likely makes more money just because I'm charged more for the food. This doesn't seem fair to those workers who are wait staffing at a more affordable restaurant. I can tip above standard percentages at those restaurants, but this isn't going to translate to the whole. It is also well known that other discriminatory issues factor in to tips (age, gender, race, attractiveness, etc...) Bottom line, tipping should be thrown out as an expectation and should have zero impact on wait staff wages. Restaurants should be forced to pay at or above minimum wage and menu prices can be adjusted accordingly. As dependent as today's society is on the food service industry, maybe it is about time they unionize and start striking at the local and/or national levels until some laws are changed to treat them fairly.
  - Camillo 11y ago
    Well, of course. The service the waiter provides does not change just because you're getting a discount on the food. On the other hand, the service is also the same whether you order two expensive items or two cheap ones, so it shouldn't scale with menu price at all, but it does. Of course, using a percentage of the price does have the advantage of scaling with inflation... but then the percentage itself has increased significantly over the last couple decades, for no discernible reason. Basically, nothing about tipping makes sense, so you just have to learn the thoroughly arbitrary rules.
jacalata 11y ago
I think there were a bunch of stories implying that it was because of pressure and misleading reassurances from the Groupon sales people signing them up combined with poor business sense from the small-time owners, in most cases.
- georgemcbay 11y ago
  I've heard the same, but the company treating Groupon customers badly is still irrational behavior. The money being lost on the Groupon is a sunk cost, so you've got: Option A: Lose money on the customer, treat them like second class citizens, probably lose the customer forever, possibly have the customer tell all of his or her friends how bad they think the business is. Option B: Lose money on the customer, still treat them just as well as any other customer or even better and try to convert them into a repeat customer and/or organic spokesperson for your business, recoup the lost groupon money over time through repeat business. I can't speak for everyone but I know that if I'm an option B customer, I'm going to be an enthusiastic spokesperson for the business. Getting a great deal and good service early on is a good way to convert me to be a customer of yours for life (early impressions really stick with you, sort of the reasoning behind buying the first round of drinks, you probably don't need to buy another drink all night because you're the cool guy who bought the first round). So all-in-all, I don't think all the blame of having Groupon customers treated badly (if this even exists as a real thing and isn't a perceived occurrence that isn't statistically a real thing) can be placed with Groupon. I suspect at least part of it is likely just the fact that a lot of businesses have terrible customer service these days (probably due to a number of factors including low wages, races to the bottom on margins, etc) and as a customer you would have been treated pretty poorly anyway but the groupon thing gives you something to latch onto as far as reasoning it out.
  - chavesn 11y ago
    This is great advice. The thing many businesses probably fail to realize is that, generally speaking, where [A] is the baseline customer base, the audience with Groupon is not "[A] with some subset of [A] paying cheaper prices" but instead, "[A] + [B], where [B] is an audience they never would have found." To increase your audience, you almost always have to pay. In contrast to big business, America especially likes to celebrate and idealize the small business owner as the one who truly knows the value of treating the customer right. But if these stories are frequent, it probably just exposes the sad truth that it's not as common, even in small business, as we like to believe or hope.
steveklabnik 11y ago
The business might consider it a marketing expense, but the employee might also take a hit through things like reduced tips.
- commandar 11y ago
  Yeah, for things like restaurant deals, theoretical tipping etiquette is that you should tip based on the pre-discount total. The vast majority of people don't/don't realize that's the case, though, which makes huge half-off type deals pretty miserable for wait staff.
- xiaoma 11y ago
  Especially if they preemptively treat the customer horribly!
kkhire 11y ago
I like to compare it to the research done on olympics and their economic impact. Big investment in hopes of a strong injection in the economy. The opposite happens, once the event is done, the facilities/stadiums/everything goes unused -- novelty and interest lost. Same thing happens to these business when they worked with Groupon: make some money (oftentimes they don't even break even) during their promotions/deals, but as soon as it was over hardly any bothered to return.
kaonashi 11y ago
Groupon makes money the more transactions take place, but for the business there is a limit to how many transactions you can successfully carry out with optimal service. Sounds like this tension hasn't been managed very well.

by zck 11y ago

RyanZAG 11y ago

It's not always the company. In the case of the USA and their insane tipping customs, a customer coming in with groupon specials is going to end up tipping less. Since the whole service at USA restaurants is based around tipping, the employees know they won't really get tipped well so they're very customer hostile.

BashiBazouk 11y ago
Maybe that's an upside. If the wait staff loses it's professionalism that easily, it tells me something about the restaurant...
imgabe 11y ago
I'm sure a lot of people do that, but the appropriate etiquette when using a coupon at a restaurant is to tip on the full price. Most adults who frequent restaurants should know that.
- RyanZAG 11y ago
  You know that most of the world's population doesn't tip at all? Given that, it seems kind of strange to assume everyone just knows the appropriate tipping etiquette without being told when getting the coupon or sitting down. Plus the most active users of groupon are probably doing it to save as much money as possible with coupons. They're unlikely to willingly throw away those savings on massive tips... and from what you hear about frequent groupon users they really don't tip the price pre-coupon.
  - camdenre 11y ago
    I would guess that he meant to say most "American" adults should know better.
  - imgabe 11y ago
    I was replying to your comment specifically about tipping customs in the US. If you grow up in the US and go to restaurants it's not unreasonable to absorb tipping etiquette along the way. You still save money with a coupon, you're not paying full price for the meal. That's no reason to screw over the server who depends on tips for a living. If someone is seriously strapped for cash and needs to save money, they should be cooking at home, not going to restaurants. Don't get me wrong, I'd happily do away with the whole tipping culture and just have the entire price printed on the menu. But, as long as we have tips, take the time to learn how to do it right.
    - homulilly 11y ago
      I've grown up in america and is the first time I've ever heard this and I imagine I'm not alone. It's also kind of difficult since people factor the tip at the end of the meal when they get the receipt, not when they have a menu in front of them.
      - dionidium 11y ago
        I hope you're an exception. Tipping on the full amount should be a fairly well-known practice. Also, your receipt will probably show the original price and the final, discounted price. You shouldn't need to remember the menu.
        bigtunacan 11y ago
        That's a huge assumption. It's something I also have never heard of until reading this post. I'm personally bothered by the entire tipping culture in the US. Once used to acknowledge that someone has gone above and beyond, now it is just used by businesses as a means to pay below minimum wage (which is too low already). The fact that it is also percentage based this means a person working at a restaurant with higher prices likely makes more money just because I'm charged more for the food. This doesn't seem fair to those workers who are wait staffing at a more affordable restaurant. I can tip above standard percentages at those restaurants, but this isn't going to translate to the whole. It is also well known that other discriminatory issues factor in to tips (age, gender, race, attractiveness, etc...) Bottom line, tipping should be thrown out as an expectation and should have zero impact on wait staff wages. Restaurants should be forced to pay at or above minimum wage and menu prices can be adjusted accordingly. As dependent as today's society is on the food service industry, maybe it is about time they unionize and start striking at the local and/or national levels until some laws are changed to treat them fairly.
- Camillo 11y ago
  Well, of course. The service the waiter provides does not change just because you're getting a discount on the food. On the other hand, the service is also the same whether you order two expensive items or two cheap ones, so it shouldn't scale with menu price at all, but it does. Of course, using a percentage of the price does have the advantage of scaling with inflation... but then the percentage itself has increased significantly over the last couple decades, for no discernible reason. Basically, nothing about tipping makes sense, so you just have to learn the thoroughly arbitrary rules.

jacalata 11y ago

I think there were a bunch of stories implying that it was because of pressure and misleading reassurances from the Groupon sales people signing them up combined with poor business sense from the small-time owners, in most cases.

georgemcbay 11y ago
I've heard the same, but the company treating Groupon customers badly is still irrational behavior. The money being lost on the Groupon is a sunk cost, so you've got: Option A: Lose money on the customer, treat them like second class citizens, probably lose the customer forever, possibly have the customer tell all of his or her friends how bad they think the business is. Option B: Lose money on the customer, still treat them just as well as any other customer or even better and try to convert them into a repeat customer and/or organic spokesperson for your business, recoup the lost groupon money over time through repeat business. I can't speak for everyone but I know that if I'm an option B customer, I'm going to be an enthusiastic spokesperson for the business. Getting a great deal and good service early on is a good way to convert me to be a customer of yours for life (early impressions really stick with you, sort of the reasoning behind buying the first round of drinks, you probably don't need to buy another drink all night because you're the cool guy who bought the first round). So all-in-all, I don't think all the blame of having Groupon customers treated badly (if this even exists as a real thing and isn't a perceived occurrence that isn't statistically a real thing) can be placed with Groupon. I suspect at least part of it is likely just the fact that a lot of businesses have terrible customer service these days (probably due to a number of factors including low wages, races to the bottom on margins, etc) and as a customer you would have been treated pretty poorly anyway but the groupon thing gives you something to latch onto as far as reasoning it out.
- chavesn 11y ago
  This is great advice. The thing many businesses probably fail to realize is that, generally speaking, where [A] is the baseline customer base, the audience with Groupon is not "[A] with some subset of [A] paying cheaper prices" but instead, "[A] + [B], where [B] is an audience they never would have found." To increase your audience, you almost always have to pay. In contrast to big business, America especially likes to celebrate and idealize the small business owner as the one who truly knows the value of treating the customer right. But if these stories are frequent, it probably just exposes the sad truth that it's not as common, even in small business, as we like to believe or hope.

steveklabnik 11y ago

The business might consider it a marketing expense, but the employee might also take a hit through things like reduced tips.

commandar 11y ago
Yeah, for things like restaurant deals, theoretical tipping etiquette is that you should tip based on the pre-discount total. The vast majority of people don't/don't realize that's the case, though, which makes huge half-off type deals pretty miserable for wait staff.
xiaoma 11y ago
Especially if they preemptively treat the customer horribly!

kkhire 11y ago

I like to compare it to the research done on olympics and their economic impact. Big investment in hopes of a strong injection in the economy. The opposite happens, once the event is done, the facilities/stadiums/everything goes unused -- novelty and interest lost. Same thing happens to these business when they worked with Groupon: make some money (oftentimes they don't even break even) during their promotions/deals, but as soon as it was over hardly any bothered to return.

kaonashi 11y ago

Groupon makes money the more transactions take place, but for the business there is a limit to how many transactions you can successfully carry out with optimal service. Sounds like this tension hasn't been managed very well.