With a man-in-the-middle between product and service providers, both later are at a loss. Customers could get a higher discount, while the providers could make (more) profits. Exposure is overrated imho with groupon's army of clones, as the crowd is nomadic and isn't loyal. Moreover it may bend perceptions and expectations for the future.
Long term effect of these deals are none to negative, as they may easily cannibalize regular business. Volumes of customers in the services business essentially requires time. That's obvious for the article above where costs of paralel servicing are very high (other helicopters).
Shameless self-promotion: our startup is changing that by removing the intermediary and seller fees with a simple widget for web shops. Unlike others with restricted applications in services, we've made it universally applicable to anything that sells online and offline, above $30 most likely. It's meant to work as sister button to the Add to Cart - _Join Group Buy_.
It is more than a marketing/advertising tool. It is a new way of seeing shopping.
While the exposure comes through the clever system of incentives, we're working on much more by opening the deals information to the world in real time.
It seems Groupon is hot right now but I'm still not on the bandwagon. Most of the deals I see appear to be along the lines of "2 week membership to gym/yoga/karate for $X" or "Some tourist attraction for $X (normally $2X)"
Basically, stuff where the vendor is trying to get your foot in the door or simply selling you an attraction where the "an $X value" may or may not be accurate.
The helicopter one is interesting, particularly because this is something those 2,600 people would never search for in Google. But then end result shows that deals like this benefit Groupon much more than the vendor.
If stuff like this keeps happening, are people going to want to continue offering deals on the site?
They made $100 MM last year, their first year being up in more than a handful of cities. I think they're in good shape.
It's funny, there's a ton of Groupon people here in Chicago and at parties they all whine about the local media not covering them more. Yes, I'm sure they want to heap praise upon a business hoovering up all their advertising dollars..
I think the driving factor is "OMG 2-hr helicopter lesson and I've never even flown as a copter passenger before for only $69!" -- not Groupon's magic pull. And PhilG makes it clear they're selling these initial lessons far below cost.
I wonder what Groupon's repeat business is like. Do they convince some small business to price their service incredibly under cost, take their rip, and leave the business to deal with 2,000 loss leading customers? I'd love to hear from this helicopter company again in a few months after they've worked their asses off to give out 2,000 cheap lessons all for 2 or 3 repeat customers. That model simply isn't sustainable.
Yah, very interesting if you measure in that context.
Lots of the restaurants seem to be doing a "food at cost" type offer and make it up on the booze sales. For a restaurant that could be a great strategy -
Long term effect of these deals are none to negative, as they may easily cannibalize regular business. Volumes of customers in the services business essentially requires time. That's obvious for the article above where costs of paralel servicing are very high (other helicopters).
Shameless self-promotion: our startup is changing that by removing the intermediary and seller fees with a simple widget for web shops. Unlike others with restricted applications in services, we've made it universally applicable to anything that sells online and offline, above $30 most likely. It's meant to work as sister button to the Add to Cart - _Join Group Buy_.
It is more than a marketing/advertising tool. It is a new way of seeing shopping.
While the exposure comes through the clever system of incentives, we're working on much more by opening the deals information to the world in real time.
http://www.syncfu.com