Why is groupon bad

With this model, businesses can easily end up losing money. After discounting its product or service and then allowing Groupon to take its cut, a company might not even make enough to cover the cost of what it's selling. If the deal doesn't earn enough repeat customers, then the merchant is worse off than before it worked with Groupon. On the bright side, if you find that you're losing money, Groupon doesn't charge any fees to pause or cancel the service.

Groupon customers are often savvy deal-seekers who purchase and use one-time coupon discounts without intending to become regular customers. Instead of offering one introductory service at a deep discount, you might try splitting your deal in such a way that requires people to give you more than one try.

For example, if you offer guitar lessons, instead of offering a coupon for half off one lesson, offer half off a package of two lessons. That way, people who purchase the coupon will need to try you twice to get their full deal, and that may be enough to convince them to sign up for more.

Setting limits on the number of vouchers sold or including restrictions to control how people can use their deals is also important, especially for small businesses. If a deal is popular, you may get an influx of new customers and increased demand for your services, which could backfire if you're not ready for it. As Groupon's marketplace model continues to develop, you might also try some of its newer alternatives to the voucher model, such as online booking or store pickup.

Groupon is a solid advertising platform, has a good reputation among consumers, and is easy for business owners to start using. In the short term, Groupon and similar sites can be a powerful and effective way to generate new leads for your business. Time will tell what Groupon's marketplace model will mean for merchants. Regardless, you should probably not rely solely on Groupon to grow your business. Nor should you rely on it to save your business if you're facing serious troubles.

If you are going to use Groupon, make sure you do some careful planning to ensure that you don't end up losing more money than you earn. Actively scan device characteristics for identification. Use precise geolocation data. Is that how you want your employees to feel? I don't think so. I doubt Kim gave it any thought in the beginning either. I doubt anyone else considers that while reading about the "crush of customers" businesses receive.

This promotion also stole sales from regular customers who would have bought more later in the year impacting her bottom line during the crucial bill-paying month of September. And can you blame them? Why not buy 5 and plan your holiday shopping? As we've seen Groupons can be great if you are the buyer but terrible if you are the business. Yeah Buts Those of you saying, "What about the incremental sales? Coupons clippers are notoriously thrifty. They chase the "deal of the day" not you.

Those of you saying, "What about all that great exposure to those millions of people? Isn't that worth something? Those of you saying, "Yeah but if she'd created the offer better it wouldn't have been so bad. Those of you saying, "How about all those raves from other businesses? GAP is freely mining the discount bin. Those of you touting that even the GAP recently used Groupon should bear this from venerable blogger Mashable , " I'm sure they will move a lot of product but are they cannibalizing their target market, acquiring unprofitable customers and training them to look for the deal?

I think so. Final thought Just because you see lemmings, doesn't mean its a good idea to follow them off the cliff. He is a nationally recognized expert on retail sales training , customer service, sales, and marketing. With over thirty years experience beginning in the trenches of retail and extending to senior management positions, he has been a corporate officer, franchisor and entrepreneur.

In Person Sales Training. Retail Retail Sales Training. Retail Sales Training Online. Retail Sales Strategy. Retail Merchandising. Retail Customer Service. My colleagues would adamantly advise against Groupon. However, at the end of , a former high school classmate and I reconnected via Facebook and learned she had become a massage therapist as well. We shared our best practices and tips with each other, discussed successes and lessons learned.

She recommended Groupon. I also had concerns about the location of my studio versus hers. So I decided to give it a try. I had 4 campaigns. So I requested that my campaign be paused. After some hesitation and countering my objections, they agreed. I am honoring those who purchased but I am extremely disappointed with my experience especially since they changed their policies during the quarantine period. The status quo involved merchants receiving their portion of the revenue share on a regular schedule with no further action needed — whether the customer used the Groupon or not.

This new change puts merchants in an especially bad spot during this pandemic when cash flow is important for survival. Over the year-long period I worked for Groupon, there were two incidents, over an extended period of time, where salespeople were asked to stay an extra two hours past the eight-hour mark of our shifts. At the time this was all going down, I was still commuting to the city from the suburbs as many other Groupon salespeople did and the train schedule did not line up well with this change.

I would get home at 10 p. Because this was definitely wrong, Groupon eventually lost a class-action lawsuit based on salespeople being misclassified as exempt employees during these periods of forced overtime. But still, it was a nice win against an enterprise organization that treats its employees as commodities, whose seats are more valuable to the company than the living, breathing people who sat in them.