Comment Groupon is for Marketing (Score 1) 611
I couldn't find the video, otherwise I'd put the link here, but a few months ago, I saw a video by 3 customers of Groupon: scuba dive shop, steak restaurant, and cupcake shop. Basically, Groupon takes 50% of the coupon value. So, if a merchant gives 50% off retail on the coupon, they only get 25% of retail. The cupcake shop experienced the same thing as this baker, but revised his idea of what Groupon is and is using it successfully. He now thinks Groupon is marketing with associated costs and just budgets accordingly. He also put some stipulations on the coupon: 1. No choice of flavors, you get what he has in stock and they choose what you get. 2. You must notify him advance (2 days), if you have a big order.
I just don't understand why Groupon doesn't set expectations properly with their merchants. When these bad things happen, all 3 (Groupon, Merchant, Customers) lose. Groupon loses follow-on business from the Merchant. Merchant gets overwhelmed and a bad reputation. Customers get a bad product or experience. If Groupon sets the expectations properly, I don't see why all three can't have a good experience. I assume the Groupon sales people are just pushing volume and don't have any training. But it should make sense that by setting expectations properly and coaching the Merchants, that Groupon would have follow-on business from the Merchant -- a much better business model than pushing a one-shot coupon.