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The deal is... let's disregard our COGS, halve the pricing, then send half of the revenue to Groupon. This sounds so inanely stupid for a SMB owner that every t

by jw84 16y ago

The deal is... let's disregard our COGS, halve the pricing, then send half of the revenue to Groupon. This sounds so inanely stupid for a SMB owner that every time I load up Groupon.com I'm just amazed. Amazed that there are so many desperate businesses out there. Groupon is to coupons as Digg is to traffic. One gives you bad customers the other gives you bad traffic. Critical mass that few owners with sophistication and expertise in managing. I would like to know more experiences in dealing with account managers at Groupon. They should hand-hold some clients more, explain to them the concept after deals are posted online, teach them how to harness customer information to prepare for all this. You know, being a good marketing partner, establishing a working relationship to repeat business, and thrive. But that's not aligning with Groupon's interests, Groupon's model only works when SMBs don't think this through. That's why you hear hyperbole--you'll never have to advertise again!--it's snake oil sales tactics. They want to come off as being neutral good but end up lawful evil. Groupon has said they have 35,000 businesses waiting to participate so I guess the real lesson to making money isn't so much about satisfaction but capitalizing on naivete. Last week I learned making money isn't about making something good but copy what's out there until the numbers work.

earl 16y ago
To be fair, other companies are less, well... stupid. Today on SF Groupon, I see a climbing gym trying to get new people to come for their first lesson by offering 2/3 off. That makes a lot more sense along the lines of the gillette / dealer model (the first one is free). I think a coffee shop, or really anything selling a commodity, is particularly ill suited to groupon type sales whereas a climbing gym, or really any business with probably a monopoly in a geographic area, is particularly well suited.
let5ch 16y ago
"But that's not aligning with Groupon's interests..." Have you visited their site? Have you looked over the separate site for businesses? Groupon's interests cover not just themselves but also their community AND the SMBs. How else to explain the fact that 97% of businesses would do another Groupon offer? Separating a Groupon offer from its residual effects is the same short-sightedness that Posie's suffers. Like many other commenters have said here, it's marketing - the cost of customer aquisition. What a company does with the customer once they're through the door is critical. The Posies blog post sounds like lots went wrong - misunderstood goals for the Groupon itself, ill-conceived deal (perhaps even a bad fit for a Groupon at all - too small of a deal), ill-prepared staff. Time will tell if the Posies Groupon created any new loyal customers - that's the whole point.
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by jw84 16y ago

earl 16y ago

To be fair, other companies are less, well... stupid. Today on SF Groupon, I see a climbing gym trying to get new people to come for their first lesson by offering 2/3 off. That makes a lot more sense along the lines of the gillette / dealer model (the first one is free). I think a coffee shop, or really anything selling a commodity, is particularly ill suited to groupon type sales whereas a climbing gym, or really any business with probably a monopoly in a geographic area, is particularly well suited.

let5ch 16y ago

"But that's not aligning with Groupon's interests..." Have you visited their site? Have you looked over the separate site for businesses? Groupon's interests cover not just themselves but also their community AND the SMBs. How else to explain the fact that 97% of businesses would do another Groupon offer? Separating a Groupon offer from its residual effects is the same short-sightedness that Posie's suffers. Like many other commenters have said here, it's marketing - the cost of customer aquisition. What a company does with the customer once they're through the door is critical. The Posies blog post sounds like lots went wrong - misunderstood goals for the Groupon itself, ill-conceived deal (perhaps even a bad fit for a Groupon at all - too small of a deal), ill-prepared staff. Time will tell if the Posies Groupon created any new loyal customers - that's the whole point.

deleted 16y ago
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