4 ms·
Why should merchants give Groupon 50% of the face value of coupon, if their competitor will do the same for 25%? And the next one at 10%? Brand. It's why peopl
by zaidf 16y ago
Why should merchants give Groupon 50% of the face value of coupon, if their competitor will do the same for 25%? And the next one at 10%?
Brand. It's why people pay for bottled water vs. free tap water.
It's why Groupon can argue they can send more people to you than their competitors.
- ajays 16y agoDo you really think that the typical Groupon customer, who is extremely cost-conscious and willing to jump on a deal like this, won't switch to another coupon company if given a better deal? Say Groupon offers a 50% off $10 coupon for $5, and keeps the $5. The business is out $10 (for the goods). Now Soupon (fictitious name) comes along, offers a 60% off $10 coupon for $4; but keeps $2 and gives the business $2. Now the business is out only $8; the customer gets a better discount; and Soupon still makes money. Don't you think most of Groupon's customers will move to Soupon in a heartbeat?
- zaidf 16y agoI don't, purely because local merchants are very, very brand conscious and suspicious of new brands. It is why they keep giving their business to Yellow Pages and to newspapers. It's why Google's had such a hard time cracking the local market. Groupon is the first tech brand that local merchants have totally bought into. Sure a percentage will be adventurous and go with the cheaper groupon-clone, but the vast majority will stick with the brand name imo.