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/
I am a big Groupon fan but I had never thought of the small companies in all of this. I admit to selfishly being blindsided by the benefits to me as opposed to seeing different angles. You bring up a very good point about the inability to cap the number of coupons sold.I can just imagine the overwhelming amount of calls and chaos that must ensue after being featured on Groupon. I agree with you, more flexibility and control is a must if Groupon wants to stay on top.
ReplyDeleteWhile I do agree that Groupon does benefit larger businesses, that doesn't mean that it's totally neglecting smaller ones. The truth of the matter is t hat smaller businesses have to work harder to gain ground on larger corporations, and while it may not be fair it's the truth. One of the best referral sources is word of mouth, so if a company has trust in it's product or service, they shouldn't hesitate to be "aggressive" with their offering. To be able to join a network with over 70 million worldwide users can be priceless. I did read tho that 7 out of 8 merchant requests are declined so It is difficult to get in no doubt.
ReplyDeleteI agree that Groupon tends to chose bigger firms to perform their deals, but they have to do it like this in order to make some profit. Sometimes the smaller business do not have the recognition from the crowd to incite the people to get on with the deal. Furthermore, Groupon has revolutionized the world with its business model online;therefore, there still a lot of improvement to be done. Let's just hope that they can do it fast so everybody can enjoy their benefits.
ReplyDeleteIt would be nice to see Groupon do a re-vamp. May be that way they would survive on their own and not need to sell. Some of their offers are great while others are well...limiting. I think may be they should try placing polls on their site where members could give ideas of businesses they would like to get more offers from or kind of business they would like to see. This would mean that people would be more willing to use services if they feel that it appeals to them.
ReplyDeleteI think I agree with you 90%. Small business do struggle but sometimes you need a little push to bring those customers in. I work at a restaurant and whenever they give away free things, we have a problem. The calls do not stop. It's hard to turn away people. It does hurt business in the long run.
ReplyDeleteI did not know the company had those types of requirements because what I have actually seen in the page are not big corporations; instead, businesses that I have never heard of.
ReplyDeleteIt might be a way, as Rchueco22 said, to make a balance in order to make profit.
I think a business always has a room for improvement, and Groupon definitely has to add some features and make some changesto its infrastrucute. Now, the lack of statistics and support to small business could be also an opportunity for other people to begin a new project incorporating those things that Groupon doesn’t have and become an aggressive competitor.
I was not aware that Groupon required some many things to have business with them. That might not help many small businesses because many of those places do not meet certain expectations. I am also sure that business which are mainstream have an advantage because they are know and at the same time it can bring benefit to Groupon. Big businesses joining in brings other to it because they have to be up with the competition. I think that as these becomes more popular than it already is, smaller businesses might finally get a chance to introduce themselves to new customers buy using Groupon.
ReplyDeleteGroupon has become quite popular in the social media market. The consumers help promote the deals they have purchased and 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. I hope this info is helpful for our How does groupon work business.
ReplyDelete