

Groupon Closes the Redemption Loop With Loyalty Rewards - bsmith
http://techcrunch.com/2011/09/27/groupon-loyalty-rewards/

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jasonwilk
This is Groupon's best product to date. I don't know about everyone else on
HN, but I feel like a good majority of people I know have at least bought one
Groupon by now, where their credit card is stored. To take that major
advantage and apply frictionless rewards for users, is recipe for major
disruption.

Checking in to a place on Facebook and FSQ is almost entirely useless for a
small business. They need $$$, not someone looking to get 10% off for letting
their friends know they are at a place they probably are all well aware of. I
hope Grocery stores sign up for this, so for once in their history they can
make use of their 'loyalty program', which probably has over 10,000 purchases
tied to my phone number for almost no purpose at all.

I'm not saying this is perfect, but this is the first product i've seen in a
while that seems like useful software.

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sunchild
Just as all roads in the enterprise lead to email clients, all roads in daily
deals lead to loyalty programs. Forgive me for being blunt, but Groupon's move
into loyalty programs was basically inevitable, if you really think about
their business model. In fact, every merchant-middle-man-operation of any kind
will eventually adopt (or join) a loyalty program. That's why you see them at
grocery stores, pharmacies, credit card companies, online retailers, etc.,
etc., etc.

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Woost
Can you expand on why you think that is? (not arguing, just curious as to your
reasoning)

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sunchild
It's structural; a middle-man in the merchant sales cycle presents two
fundamental value-add propositions:

1\. Eliminate the hassle of finding and dealing with prospective customers,

2\. Educate the merchant about customer demographics and preferences.

That latter point is why all "sales broker" business models eventually lead to
loyalty programs (which is a euphemism for data collection, volume incentives,
and targeted advertising).

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Woost
That article was a little lite on details, does anyone have any idea how
groupon will get the details about when you spend money at the merchant?
Obviously it's not from the banks, so they must have a deal with merchants.
But that deal would require them to modify their point of sale software to
support phoning home to groupon. That seems like a tall order for places which
have, say, an old filemaker database holding their sales records.

As an aside: Would a merchant really want to turn over all its sales data to
groupon?

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austincav
May answer your question: [http://www.quora.com/How-does-Bloomspot-Prime-
aggregate-POS-...](http://www.quora.com/How-does-Bloomspot-Prime-aggregate-
POS-data)

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kosei
Great idea, but the biggest problem is that it incentivizes users to pay only
with credit cards. For a small restaurant owner or retailer, those bills can
go upwards of $10,000-20,000/month, and could be incredibly detrimental for,
say a frozen yogurt shop.

Now, the ease of use will be a big part of this (just using your own credit
card), and may alleviate some of these troubles for the retailer from a
training perspective, but this is yet another potential for business owners to
make bad decisions sacrificing long-term profit in exchange for short-term
growth.

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ashbrahma
It was interesting to note that Groupon thinks Foursquare check-in's is a
"necessary evil"..

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dmk23
This could actually save their business model. Merchant churn is really their
biggest problem. Becoming their "loyalty solution provider" could help re-
engage the merchants. The only puzzling thing is why Groupon has not done it
earlier.

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bsmith
I completely agree. In the same vein, Scoutmob allows merchants to offer their
customers "return perks" for visiting their store a second time, and I think
this has been a very effective strategy for them business-wise.

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brianbreslin
Think they will compete with google wallet and the other mobile payment
platforms?

If they can reign in costs (by many magnitudes) I would go long on them. Scale
and size make them a quite formidable player in retail.

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jc4p
Am I the only one who sees a huge problem with opting into having Groupon
track my purchases? I'd definitely rather carry around a paper card that gets
holes punched in it than have a company like Groupon track my purchases.

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prostoalex
It's not a novel idea, RewardsNetwork awards miles for dining with merchants
they have signed up <http://skymiles.rewardsnetwork.com/>

UPromise has had a similar program tracking not just restaurants, but all
sorts of shopping venues <http://www.upromise.com/welcome>

American Express will also track your Amex purchases and assign loyalty
rewards based on their Link, Like, Love Facebook promotion
<https://www.facebook.com/americanexpress>

Are you not okay with an idea? Or not okay with Groupon, Inc. being another
company to implement this fairly commoditized loyalty program?

