GROUPON has become quite popular in the social media market; the main reason for their success has been left to the consumers themselves. The consumers help promote the deals they have purchased. This is because the deal is only made possible if a certain number of people purchase the featured deal, which motivates customers to spread the word to friends and acquaintances via their social networking sites. With such a simple business model, you have to wonder if GROUPON will continue to dominate, or will copycats be able to revamp the model, offering smaller businesses more security in their feature deals.
In today’s economy small businesses have been struggling, and you would think that opting to use GROUPON in order to attract new customers would be a “no brainer.” Turns out there are a few unfortunate requirements a company can encounter. The feature deal must meet GROUPON satisfaction, meaning they may reject a company’s feature request if the company does not have enough press reviews or even if the featured price is not
"aggressive" enough. Another issue and important question would be how many of these GROUPON customers are repeat customers, and does GROUPON make it easy to track these new customers. The answer is NO. Although it is possible to view the statistics on total sales, there is no detailed customer information, which is what a company would get if they handed out coupons themselves.
GROUPON offers a few services to help companies prepare for the big day of the feature, which may end up in an eruption of phone calls. Unfortunately this could turn a business into a call center, which can prevent regular business if not prepared. One problem I see for small business owners would be the inability to cap the number of featured coupons sold. Even though you can specify a minimum required before the “deal is on,” a small business could take a big hit on profit if the number of features sold exceeds their estimate. And since companies are bound to the GROUPON, this is not a risk I would want to take.
Personally, I’m rooting for a revamp, one that gives more flexibility and control to the company [more specifically, the small businesses].
I say GROUP-OFF.
Sources:
http://www.grouponworks.com/
http://gigaom.com/2010/02/01/groupon-and-the-wannabes/
http://visionarydance.com/2010/09/rejected-by-groupon-please-write-a-review/
http://gesterling.wordpress.com/2010/03/25/the-dark-side-of-groupon-sites/
http://e-marketingforsensiblefolk.blogspot.com/2011/03/groupongroupies.html
http://www.groupon.com/blog/cities/now-available-deal-statistics/
