• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Flirting with Groupon

by on
in Centerpiece,Leaders & Managers,Leadership Skills

Chicago-based Groupon has spawned an industry of deeply discounted coupons.

How it works: There’s no upfront cost to merchants, who can offer an $80 product or service for $40, then split that $40 with Groupon. Creative copywriters sweeten the deal, and time limits hasten sales. Women are the main consumers—and of course, what makes these offers social is that users pass them along to friends.

We spoke with the owner of a tree nursery in Virginia who explained that using Groupon is basically a form of advertising. It gets people in the door. From that point on, the product or service has to stand on its own.

The concept does have growing pains. Merchants risk becoming swamped by an influx of customers, or of attracting only bargain-hunters who never return. Rice University reports that more than a quarter of merchants offering a daily deal lose money on it.

Then there’s the Yelp factor. (Yelp is an app that searches for places to eat, shop, drink, etc., and offers reviews from an active community of locals in the know.) Coupon users routinely check on what their neighbors say about a merchant before buying a coupon.

Despite a valuation of $13 billion for Groupon at its initial public offering in fall 2011, it’s not clear if the business will hold up.

Bottom line: If this model catches your fancy, try it, with precautions. Make sure you’re solid on Yelp. If you’re afraid of a customer deluge, cap the number of coupons. And never take your eye off quality.

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/29703/flirting-with-groupon "

{ 1 commentsῂ read them below or add one }

Tax man March 2, 2012 at 12:23 pm

Does it rreally make much difference in terms of the income tax by using groupon – financeminister.in


Leave a Comment