Re:Groupon’s Success Disaster
by pavel_lishin on Thursday September 16, 2010 @03:12PM
(#1698786)
> By taking a high cut
This is what confuses me. Shouldn't the split have been determined before the contract was signed? I don't understand how they could have made a deal with Groupon, but not worked out who would keep what percentage.
Re:Groupon’s Success Disaster
by potatolicious on Thursday September 16, 2010 @04:36PM
(#1699070)
Based on the author's blog post, the split was determined beforehand, but Groupon did not allow them to set an upper bound on coupons sold. This seems to be a recurring story - business owners willing to take a loss for marketing via Groupon, but with no effective ways of controlling an upper cap for this loss.
The part that really tuned my brain anti-Groupon in this article was:
Groupon sold consumers a $13 Posie’s credit for $6, and then sought to keep the entire $6.
I mean, that's a 100% cut with the business getting nothing. If that's serious, Groupon look unethical; if it's not, then the coffeeshop is lying (and others have doubted the sincerity of the figures, too, as well as their ability to run a business full stop). Either way my mind is slightly twisted to dislike Groupon now. Subtle!
By taking a high cut and targeting discount-minded (rather than repeat-custom-minded) clientele, the $8000 basically went down the drain, and the business experienced more headaches dealing with testy Grouponers than they would normal clients.
Part of this is a learning experience about what you offer as a discount, how you offer it, and who you target. Instead of offering half-price cookies, offer half-price vegan cookies or similar. Do a smaller test first (though maybe Groupon doesn't allow that?) so you can get an idea of repeat rates and discount-hungry one-off customers.
The word of mouth gained from this one campaign may well echo forward for months to come, but it's still sad to see a business struggling when a site like Groupon is supposed to be fantastic for both parties involved in the transaction.