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"1) Their sales and marketing expenses are incredibly high." I see this point being made in pretty much every Groupon related analysis. Why is it so expensive
by modarts 14y ago
"1) Their sales and marketing expenses are incredibly high."
I see this point being made in pretty much every Groupon related analysis. Why is it so expensive, and why isn't anything being done to cut down on these costs? I'd think that once customers have been acquired, the cost of maintaining them is a fraction of the acquisition cost; so the outlays on sales and marketing should decrease (from my admittedly layman perspective.)
- Tloewald 14y agoI think that Groupon's customer churn has always been huge, one of the reasons many investors though it was not a good bet.
- jskopek 14y agoThat points to a bigger flaw in the Groupon model, namely that most businesses who try a promotion end up coming out disappointed. There are a number of reasons for that - bad planning on the retailer's end, excessive promotion fees for Groupon, and so on. Until Groupon solves this problem, I don't see an optimistic future. Building a product your consumers loves leads to repeat users and growth. Building something retails hate leads to Groupon.