Ceaseless couponing behemoth Groupon has provoked serious grumbling lately as businesses wake up to the fact that these deals may not be in their best interests. Today: business owners who've used Groupon speak!
After our pieces about Groupon in the past week, we heard from several businesspersons whose experience ranged widely. What with the earlier focus on the fundamentally harsh deal that Groupon offers, it seems valuable to hear from a few different perspectives.
The Realistic Perspective: from a restaurant owner in New Jersey.
As full-fledged English speakers, we understood the terms of the deal. Even though we knew we would take a loss, we thought it was a good way to reach a large amount of people without having to spend money upfront. That was they key selling point for us.
We sold 350 Groupons and the majority of customers have been decent. They've spent more than the Groupon's value and have tipped the servers.
We did get some jerks who tried using the Groupon twice and even one couple who only wanted to use half of the Groupon now and half later because they "weren't that hungry" lol. But this is to be expected with any deal.
Groupon does have a cool redemption process in which you can scan the barcode from the printout directly with your iPhone. It's been almost 3 months and only a fraction of the Groupons have been redeemed. Our sales rep did mention that the redemption would peak at the beginning of the deal and toward the end, as the expiration date approaches. This same sales rep was very nice, very informative and very receptive to our requests.
The only issue I have with Groupon is their black-out period in which they forbid you to distribute any other offer until 90 days after your promo. This seems a bit like couponing fascism and I don't even know if it's legal or not...
In closing, I'm glad we did the Groupon but I don't think we'll do it again. Especially now.
The Hounded Perspective: from a California cooking school owner.
I was aggressively hounded by Groupon a year ago…every few months a ‘new' sales person would contact me with the same BS…oh you would make so much money on us. Well each and every time I told them …no I wouldn't. They'd try to tell me that they hit my demographic…women of a certain age with lots of money. Each time I'd tell them if they have so much money, why are they looking for a ½ off the price deal which I'd make ¼ "IF" they booked and wait 30 days to get that money from Groupon. I also don't have a way to ‘upsell' these customers like bars who can sell drinks or convince them of buying more than they started with...
Well then the copycats started calling. Some were nice and didn't bother/push me much. Others were downright mean and nasty when I said no…
My maximum per class is 12 so I don't do volume sales and I kept telling them "this will not work for my business". I still get calls.
The Mathematically Savvy Perspective: from a massage studio manager.
Sorry, I disagree with your article. I managed a massage studio that uses Groupon. Our 60 minute massage is $89.00. We, as saavy business people, negotiated 30% commission to Groupon. We also came up with a special Groupon offer; $100.00 worth of services for $50.00, 50% savings. If you wanted to use the $10.00 difference from our usual $89.00 cost, you could upgrade services for an extra $20.00-$25.00 as we didn't offer any services for just $10.00. Otherwise you would forfeit the exta $11.00 from the Groupon. That went in our pockets. We allowed only one coupon redeemed per person, but you could buy multiples as gifts. Out of the hundreds bought only about 60% were actually redeemed. Do the math; we grossed $35.00 per groupon, say 200 were not redeemed that's $7,000.00 straight profit. In one day!
The 'I Hate Coupon Customers' Perspective: from a hair stylist (employee, not owner) in DC.
I usually charge 100$ for a hair cut but by the end of the service I would end up getting 25$. After I realized what was going on I, of course, flipped out and refused service to these people. I was taken advantage of and it made my blood boil!
Come to find out, the salon owner had sold these coupons to Living Social [a Groupon competitor] so she could make her rent for the month. She is or was an accountant and couldn't manage her own money.
I think these coupon businesses are a crock and should be forced out of business. The service provider ends up being royally screwed, tieed, and penniless in the end!