
Building a Better Groupon - danilocampos
http://www.zacharyadamcohen.com/apps-and-services/building-a-better-groupon/
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tptacek
These critiques seem to fundamentally misunderstand the point of Groupon. For
businesses, Groupon is a promotional expense. It's not an engine to make
shopping more efficient. It's not a dating service that matches the best
possible customers with their ideal vendors. It is, instead, a better way to
spend money on local advertising than plowing it into radio commercials and
newspaper ads.

From everything I've read of small business experiences with Groupon, the
overwhelming majority of complaints seem to come from the quality of the leads
Groupon generates. These complaints, too, miss some of the point. Groupon
converts like online ad impressions convert. This isn't a tragedy: online ads
are _brilliant_ for businesses that can harness them, and the promise of
Groupon is to do the same for local business.

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kpanghmc
"I’ve long believed that Groupon was basically a Ponzi scheme, enriching
itself while acting like a parasite on the businesses it used to deliver its
daily deals."

I'm not sure I understand this comparison. Am I missing something here or did
the author simply make a poor analogy?

Groupon's users aren't investing their money, unless you view a 50% off coupon
as a guaranteed 100% return investment. Even so, the performances of this
"investment" isn't paid off by subsequent investors.

~~~
fluidcruft
"Am I missing something here or did the author simply make a poor analogy?"

I'm not sure I understand your reading comprehension problem. The author not
only explicitly stated his analogy about the similarities of Groupon and a
Ponzi scheme but also defined and limited the scope of that similarity in the
same sentence--not to mention the tediously long paragraphs that followed that
were spent expounding on his thesis.

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foulmouthboy
_The truth is that people who use Groupon-type deals are the last kind of
customer your business wants._

I'd really like to see a study that proves this, because unless this is true
then the entire article is bunk. Almost every form of advertising is based on
some sort of incentive, and the concept of "mention this ad" to gain a benefit
is not new. From the perspective of a small business owner, Groupon not only
makes people aware of your restaurant/store/whatever, but also gets people in
the door, which is something traditional advertising doesn't do.

I would postulate that just because they're coupon chasers doesn't make them
bad customers. It just gives the business owner more reason to provide
exceptional service and get people to come back even without an Groupon.

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blueben
Myself, and my circle of friends, use Groupon and none of us could be
accurately described as "coupon chasers". Frankly, articles like this come off
sounding angry, jealous, and ignorant.

~~~
bdhe
But within your experience, has the loss leader been justified in the
restaurants/services you used Groupon for? Did you see yourself going again,
possibly several times, for the business to recoup its loss?

~~~
blueben
Absolutely, more often than not.

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yurylifshits
I think this post has a very smart idea in it. In essence, the author proposes
that Groupon readers design 'deal templates' and businesses fulfill them. This
way, Groupon is creating true customers, not deal chasers.

The idea of 'demand-driven' Groupon is an instance of a larger trend: demand-
driven marketplaces. Before the Web almost all markets were supply-driven.
Suppliers bring the products and customers can only choose from the list. With
technologies like Google AdWords and Alibaba, customers get more power and
pull the right products/content from producers. Idea of demand-driven
marketplace can be applied to any market.

The real question is how much share demand-driven approach can get? Many
customers still prefer the supply-centric world.

~~~
tptacek
The real question is, who does a demand-driven approach serve? Businesses
spend money on Groupon to get a reliable boost in awareness for a specific
period of time that they budgeted for. They don't do it to make Groupon work
better for its users.

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bpeters
Businesses that use Groupon as a demand side solution are the ones beating
themselves up. Businesses that use Groupon as a supply side solution reap the
rewards. Groupons are great for getting rid of excess inventory, but its
terrible for recruiting loyal customers, for the reasons mentioned in the
article.

Groupon using businesses just need to understand how to effectively fit
Groupon in there own business model. Using Groupon as a catch all marketing
scheme is not the way to go.

Groupon should work with small businesses and help them understand this
instead of marketing them self as the perfect solution for marketing your
product/service.

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portman
The title on the post has been changed to _"Building a Better Groupon"_ ,
which is much less linkbaity and more in-line with the story.

~~~
danilocampos
Thanks, good catch. I have updated the submission.

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antidaily
Worse, it treats already loyal customers like shit. Oh great there's a Groupon
for my gym. Wish I could take advantage somehow; look how cheap it is! Hmm,
look at all these Groupon people overcrowding my machines and classes.

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blueben
You realize that your Gym, not Groupon, decided to issue too many coupons that
resulted in the hypothetical crowding situation? That is your Gym's fault.

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antidaily
I actually don't know if that's true or not - do businesses set the number of
Groupons available by themselves? I doubt it.

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ceejayoz
My understanding is that Groupon allows them to set a limit.

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cabinguy
The author basically described priceline...didn't he?

