On: The Math of Daily Deals: Can Businesses Profit From Groupons?

[veyron]

Are there any real empirical estimates for retention rate? No offense, but the 10% itself seems high.

[drinkzima → veyron]

We have not seen any good numbers, so we stuck with the assumption nytimes uses. 10% does seem generous.

[tryitnow → drinkzima]

The following study suggests repeat buyers range from 18% to 30% with an average of 19.9% (depending on the deal site). Loads of other interesting data are in this study.

"How Businesses Fare With Daily Deals: A Multi-Site Analysis of Groupon, LivingSocial, OpenTable, Travelzoo, and BuyWithMe Promotions"

Source: http://www.ruf.rice.edu/~dholakia/

However, I would apply a haircut since this is based on merchant perceptions, which may be overly positive (people are likely to think more highly of something they've spent money on).