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Is there a reason why deals are finite? Surely a restaurant (for instance) can run a Groupon deal once every few months?
by AndrewDucker 15y ago
Is there a reason why deals are finite?
Surely a restaurant (for instance) can run a Groupon deal once every few months?
- leak 15y agoBut I thought the main premise of Groupon is that the deal brings people in and the <fill-in-the-blank> from the business brings people back. I guess a deal could be run again to capture new customers but it's hard to imagine the need if the initial brought in customers and more importantly, brought back customers.
- AndrewDucker 15y agoThis feels a little like saying "Once you've run an advertisement then why would you ever need to run another one?"
- robryan 15y agoAny stats out there on a company that has done more than one daily deal an their resulting numbers? I would suspect diminishing returns, lots of people that took the first deal and weren't converted into customers coming back for another big discount.
- unreal37 15y agoI would argue that the only infinite supply of deals are deals where the profit margin is so high that it supports profit at 50% off plus Groupons cut. A restaurant does not have 300% profit margins, so long term a restaurant cannot support this model. Only service businesses, or businesses with fixed costs with low variable costs per additional customer, can be on there.
- pbreit 15y agoRestaurants have very high fixed costs and 60-70% margins (basically, the food) so even with a 50% cut to Groupon, they can usually make it work. With a 20-40% cut to Groupon, they can make it work without much deal overage or return customers.