I think businesses hope that these discount customers will enter cheaply ... but linger to enjoy more of the services and eventually convert into long-term, loyal customers willing to pay full price.

That just doesn't happen. People show up for one quick, cheap engagement, and then they're gone. Once front-line sales people realize this, the desire to welcome Groupon customers evaporates.

There are two culprits in this. One is the Groupon field sales force, for over-promising the business value of getting a flurry of cheap visitors. The other is the target company's senior management, for agreeing to a dumb deal and not working better with the front-line sales/service folks to make a better go of things.