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Two factors that mitigate the 75%: 1. They are betting people will spend above their groupon value. So if you have a $30 that give you a $60, they are hoping y

• uxp 16y ago
  For many businesses, betting that people will spend a percentage above their discount is a reasonably safe bet. For a coffee shop though, I can't remember the last time I spent more than 20 dollars for a couple cups of coffee and a sandwich over an evening hacking in the corner. For this shop to bet that most people would spend 20+ dollars with 13 of that being the 6 they spent on groupon is insane. If your average sales are $50 or more, than this particular deal might have been viable, but it seemed that many were walking out the door having spent only 6 to groupon for their entire purchase. I feel for the business, however. I've had to turn down customers that I know aren't going to be repeats, and it is difficult. But at the same time, I would never ever agree to a 75% reduction to my sales. My repetition period for returning customers about 4 years due to the nature of my business, so maybe I don't have the market for that kind of thing though.
• retube 16y ago
  1. Yes sure - but this is a big bet. And in this case it didn't happen. 2. Understood. But the aggressive discounting is going to encourage a lot of people who just want to get something on the cheap, and will never go there again. As point 1, you've no idea how much repeat business you're going to get. I would never do this unless I could cap or trial it first, so I could get a proper assessment of what the deal is worth.