One of the problems with Groupon is that it's not just a marketing expense. It brings people in which need to be serviced, which ties up the normal operations for the business. Businesses do retain some customers via Groupon, but it's probably less than 10%, and I think those retention rates need to be better understood so businesses can better reason for how to use it as a marketing tool.

Yeah, was in the $Z I mentioned. It's actually more than just using up normal operations. Most physical businesses have a core group of users that like the 'ambiance'. When you bring in all of these new customers, you break that. Maybe it's too crowded for two weeks, maybe wait times get too long. That leaves a bad impression on regulars who might be less keen to come back. So as soon as the coupon expires, you nearly all the new groupon customers and you've lost a share of your regulars too! That has to go into $Z too.

I get the feeling just estimating $Z is a major task, and needs to be done for every customer. So I'd guess the next 'Groupon with AI' would need to be structured around helping businesses that use them minimize $Z.

I think it's a good market actually - but it's going to need a lot of finesses and expertise. The groupon method of bludgeoning businesses with quantity didn't turn out to be correct.

>That's great for you. It's also exactly the opposite of providing value for a business as you're going to hop to the next Groupon deal

That's not always true. I rarely use a groupon alone and ending buying addons at the regular price. You might lose money in one item but win in another. That's why retails focus in bringing you to the store not matter what.

Yeah definitely. It's why I added that 'edit'. You're the type of customer that Groupon needs to be selling on to businesses. They need to identify people like you somehow and offer you coupons, while denying coupons in some way to people just looking quick discount hopping and ultimately making groupon a negative instead of a positive.

I think retails focusing on bringing people into the store is different for an important reason - when you're inside the store and buying something, it's almost guaranteed that you want a few other things too. You could jump between 10 stores all with different specials to get all of them cheaper but that's incredibly time consuming.

Groupon however is trying to get return customers. It's not about someone doing Scuba diving picking up a few extra scuba diving lessons while he's there - he has to actually come back later. It's no longer an impulse 'easiest path' purchase that retail focuses on by getting you in their store and not the store down the road.