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What does "market leader" mean in this market? The one who spends the most on direct marketing? I haven't talked to a single person who has brand loyalty to Gro
by jamiequint 15y ago
What does "market leader" mean in this market? The one who spends the most on direct marketing? I haven't talked to a single person who has brand loyalty to Groupon or uses it exclusively and there certainly isn't repeat business amongst a majority of their merchants. They're also in a business that, judging by the number of new entrants into the market, will see an attrition in profits-per-deal as time goes on.
- Goladus 15y agoMarket leader in this market means the brand that has the most users or most potential value to partners. That is, if a business is going to use a discount service to acquire new customers, the market leader will be able to bring in the most customers or the most high-value customers. That doesn't answer the question about the ratio of investor cash-outs to expansion, though. It just (somewhat) addresses the question of whether a growth strategy without profits makes any sense at all.
- jamiequint 15y agoThe issue with this is that of the businesses who run deals, many operate them at a loss. As a result, they actually do not want the maximum number of new customers that Groupon can bring. "High-value" is a different issue altogether. In my opinion, Groupon does not have ability to judge what makes a "high value" customer to the merchant as they don't ever see the customers on-site purchase pattern at a given merchant. The real value here would be separating "deal chasers" from people who actually go back to businesses they bought a Groupon at in the past which currently they have zero ability to do.