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Actually, sensible groupon offerings DO have to make money (in the long term, or short term if you don't have credit). The amount of money a rational organizat
by fleitz 15y ago
Actually, sensible groupon offerings DO have to make money (in the long term, or short term if you don't have credit).
The amount of money a rational organization should spend on negative ROI activities is exactly zero. It's just as stupid to spend your money on a -25% ROI as it is on a -50% ROI, you'd be better off putting the money in a GIC.
- radu_floricica 15y agoWhat the parent meant is that these kind of offers make more money long term. Partly by exposing your business to new customers, and partly by the simple fact that many people see your company name. So if you set aside a 10k yearly advertising budget, offering deals which make you lose 2k is perfectly reasonable - if you think the exposure and new customers are worth it. The advertising budget is already accounted in the yearly ROI, so you don't have to worry on each deal's bottom line being in red.