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Is Groupon a raw deal for business owners?We’ve heard a number of horror stories, so we wanted to see if these were the exception or the norm.
We also wanted to find out if businesses are burning out on Groupon…just before the company hits the public markets.
(A former daily deals salesperson says customers are wising up and that the going will be much tougher for Groupon, et al, going forward.)
If Groupon’s growth has been driven by curious businesses just trying the service once, the growth is obviously unsustainable. And Groupon has not yet released any information about repeat customers.
So we conducted a survey of small business owners who have actually offered Groupons to find out what they think of the service. We got 16 verified responses from business owners who have dealt with Groupon. This is obviously not a comprehensive pool, but it provides an interesting snapshot of what some companies think of the service.
The key takeaways from our survey:
- About 60% of businesses considered their Groupon experience a success, but more than half of customers do NOT want to run another Groupon. Almost 40% of Groupon customers, meanwhile, thought their experience failed.
- Groupon was not a better service to work with than its rivals.
- Most businesses said only “a handful” of Groupon buyers became repeat customers, suggesting that Groupon is not as effective a customer acquisition tool as people think.
- Half of the businesses polled said they would NOT recommend Groupon to another small business. The other half would.
For our complete results continue reading …
More than half of the businesses responding were new to Groupon--trying it within the past 6 months.
'Groupon worked great for our client because there is no variable cost for tanning salons besides electrical. Groupon is ideal for fixed cost businesses. Unfortunately, those are a tiny minority.'
'A lot of our regular customers saw the groupon and bought it. We did get some new customers but they tend to only do the offer and they did not buy anything else. So in some ways it was a success in that we got our name out there but in others it was not because it did not bring in the kind of customer that we want.'
'I was happy with how many Groupons we sold. I was unhappy with how many had been forecasted by our team and the Groupon team. We are a national company and did a Groupon on 3 markets (columbus, oh San Francisco and Lexington ). They wanted us to do more and more but we held off so we could see the numbers which wouldn't be for 6+ months. I would recommend Groupon I local businesses that need to increase their customer base and have face to face interaction where they can upsell the customer. With Company Name being just an online company, it was hard for us upsell and keep our new customer base. Since our industry is the grocery industry we attracted a lot of coupon clippers especially in Lexington where we sold 2400+ in one day.'
'Massive increase in visits to our web site, decent sell through. Groupon was very good to work with.'
'Retailers need to understand the purpose of groupon, its not to make money, its to get the word out about your business and obtain a mailing list. Also, being busy is the best way to attract more customers, when the groupon hit, our restaurant was full for weeks, combined with other promotions and good employee customer service and product delivery it was a success'
'We didn't get any sustained business out of it. We broke even on the deal. Wasted effort.'
'After sales/Customer service is not the best, they want the deal then thats it, they only pay on redemption, the quality of Groupons was bargain junkies.'
'Only brought in my regular customers. Only a handful were new customers.'
'I run a small India restaurant and we were busy right after the groupon, but very few of the customers came back to eat. Plus, those that did visit spent the minimum and barely tipped our staff.'
'Minimal groupons were purchased as it was for a coupon, not a service and those who came were only there to redeem the coupon - not to buy anything else.'
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