More Groupon Criticism

[Nikonfan]

Groupon Blamed For Demise Of DFW Small Businesses « CBS Dallas / Fort Worth

[brad]

Compete or die. Groupon does one thing: give you a good price.

Businesses differentiate themselves from competition via different ways:

1. Product
2. Service
3. Cost

If you rely solely on cost to be the differentiating factor, then you set yourself up for failure - because there will always be someone with deeper pockets that can offer it cheaper - or free.

To say GroupOn is putting you out of business would be a bit like saying Chevy is putting Lexus out of business.

[Nikonfan]

Originally Posted by brad

To say GroupOn is putting you out of business would be a bit like saying Chevy is putting Lexus out of business.

[Melany]

Originally Posted by brad

Compete or die. Groupon does one thing: give you a good price.

I've bought Groupons 3 times. All for items I wouldn't have purchased otherwise. From anyone!
In my case, Groupon BRINGS my business to places.


I fail to see how anyone can seriously blame Groupon.
Unless you NEED someone to blame, which seems to be the case here.

[jeeper]

Originally Posted by brad

Compete or die. Groupon does one thing: give you a good price.

Businesses differentiate themselves from competition via different ways:

1. Product
2. Service
3. Cost

If you rely solely on cost to be the differentiating factor, then you set yourself up for failure - because there will always be someone with deeper pockets that can offer it cheaper - or free.

To say GroupOn is putting you out of business would be a bit like saying Chevy is putting Lexus out of business.

I think that most small businesses grossly undervalue their work.

For example, the lady my wife goes to for her nails charges about $10 an hour. I don't know how she even survives at those prices. That's almost minimum wage now...

The lady is good - the best in town, I guess. But at those prices, I don't think it's a sustainable business.

[brad]

Originally Posted by Melany

I've bought Groupons 3 times. All for items I wouldn't have purchased otherwise. From anyone!
In my case, Groupon BRINGS my business to places.


I fail to see how anyone can seriously blame Groupon.
Unless you NEED someone to blame, which seems to be the case here.

We did a Living Social deal for the Haunted House this year... since not everyone cashed in on the deal they bought (we still got the money whether they came or not), I believe it worked out great for us.

Would I do the same for my photography business? Probably not... it would have to be on my terms, but I've yet to find a place (Groupon, Living Social, whatever) that didn't think they knew my business better than I did.

[LadyShutterBug]

These people griping are really, really whiny and dumb. That's all I have to say about that.

[Nikonfan]

My take is that if you don't like it, don't use it. Most of the photographers that use it do so thinking it will bring them new clients with repeat business. They then find out that the groupon customers are not going to be repeat customers. So those photographers don't use Groupon again. I learn from other peoples mistakes, so I have no interest in using it. More power to those that do want to use it though.

[kenw]

don't make longterm deals...
Groupon's shares fall below IPO price - Houston Chronicle

[Nikonfan]

Crazy huh? The stock price has actually dropped 36% in three days. Of course, stocks are always volatile when the first go public. It's still not a good sign though.

[Tom]

Originally Posted by Melany

I've bought Groupons 3 times. All for items I wouldn't have purchased otherwise. From anyone!
In my case, Groupon BRINGS my business to places.


I fail to see how anyone can seriously blame Groupon.
Unless you NEED someone to blame, which seems to be the case here.

How many times did you go back to those businesses. Just going to use your Groupon is not enough. The business probably lost money on that.

[suerenee]

I drank the cool aid and did a Living Social Deal. One of these days I'll do a blog post on all the numbers. I ended up making about $5 per hour and only had 1 customer ever return. I did have additional sales with about 1/3 of the clients but so many wanted to come in, get their prints and go. I even had folks redeem the deal towards the end and not even bother to dress up for their photos--we're talking a dude wearing socks and sandals.

I was recently contacted by another coupon type deal again. I offered to do a deal: $150, 30 min mini session and one 11x14 print. I also said they must book within 90 days and I would offer specific dates and locations. They told me it was too restrictive of a deal and their customers wouldn't go for that b/c they were all about having their choice of schedule and disk of images from photographers. They also said it was too expensive b/c their customers wanted photographer who were "affordable". I ended the call with a smile on my face. I'm happy to not fit the demographic of photographer they are looking for anymore :)

[kayumangi]

I think there is a misunderstanding about Groupon and all these other sites.

If you look at all these companies who failed to make these email aggregators work, all them had no business plan, they were not prepared for the tremendous surge of new customers, and their discounted product offering was not the right match e.g. a photographer offering a disc of all the session (big no-no for Groupon style sales), and even for those who didn't offer digital files, they had no upselling game plan.

From a biz POV, GroupOn and the like, is a lead generator. Nothing else. If you have all business processes in place (upselling, customer service, and presentation) you can't fail.

I offered a deal ($69 1 hr onlocation 11x14 print) in GroupOn, I got only 29 buyins. And 17 redemptions. Out of that I avg $350 per session plus my $34.5 per session cut from groupon. Not bad for two hours of work.

And I have other tog friends who were quite successful with GroupOn and Living Social too.

I guess what I'm saying, is that GroupOn and the like are just tools. Whether we fail or succeed is totally up to us. We should not blame the tools for our failures.

Also, about repeat customers, if you treat a GroupOn customer like any other customer and offer an exceptional experience they will become loyal customers, I guarantee you that. One mistake I keep seeing is that businesses treat and assume coupon buyers as cheap, from my experience that is not quite true. Everyone wants a deal, even the rich, even us togs, so it is a bit foolish to make such generalization.

[StevenGWebb]

The salon owner got 10 return customers out of 130 coupons, that's just shy of a 10% conversion. In my opinion not nearly as poor a return as direct mail which usually runs about a 3% conversion rate.

A previous poster was correct. The item offered should be designed to generate something additional. This is why buy one - get one one half off works for shoe stores; or, buy a meal get one free for restaurants. There has to be a built-in hook to bring the people back.

Steve

[brad]

I would think a restaurant has a higher conversion rate for return customers than say.. a photographer. People like the food, they will go back and pay full price... but not everyone understands that art (photography) is the same way.