Unless you have been under a rock for the last few years than you have heard of Groupon. Basically how Groupon works is that you you pay a reduced price for services or goods and you are allowed to redeem the Groupon within a limited time frame. For example, I recently purchased a Groupon for a sushi restaurant which allows me a sushi dinner for 2, up to a $37.50 value, for $15.
Most companies will use Groupon as a loss leader with the hopes of the person who purchased will use their services at full price later on. Although I used the original Groupon I have not been back to the restaurant. So the loss leader did not work for me as I doubt that I will go back to the restaurant.
Recently an article was written that customers are turning against Groupon for a variety of reasons. They listed 5 reasons being false advertising, overselling deals, inflated savings claims, substandard customer service, and the broken Groupon promise. As you can see Groupon has got some issues on it’s hands.
What really bothers me about Groupon is that it sounds like a really good deal for business owners. But in reality is it a good deal? Getting people in the door has always been a struggle for owners but one of the bigger issues I see when I talk to owners is getting customers to use them for a second, third, and fourth time.
What I see really lacking in most marketing strategies for business owners is a long term strategy for engaging their customers and keeping your company name in front of the customer at all times. Groupon is good for a quick burst of traffic but if those people do not come back to your establishment or use your service again than the advertising is a flop.
To read the full article go to Minyanville.com
Let me know what you think.