While the marketing industry is abuzz about Groupon, I’m finding myself more or less in the “anti-” camp.
I understand why business owners offer Groupon deals: It’s supposed to get new people in the door and expand your customer base. But I have my doubts about the deals’ effectiveness, and I’m certainly not alone. For example, many of the people who purchase Groupon deals are just bargain hunters, not potential loyal customers. If you don’t cut them a deal again, will they come back?
I also have misgivings about how Groupon puts business owners in a position where their existing customers can pay less for something they normally would pay full price for. I understand that business owners accept this risk when they use Groupon, but as the proprietor of a small business myself, it still rubs me the wrong way. Personally, I don’t use Groupons at businesses I already patronize, and the owner of at least one has expressed her appreciation for that.
Lastly, in all the debate over Groupon, no one ever talks about the fact that when a business offers a Groupon deal, it can alienate existing customers. For instance, I stop by Fromin’s in my neighborhood a few times a week to pick up some things from the deli counter. About once a week, I buy a loaf of rye bread. Every time Fromin’s runs a Groupon special, though, they sell out of rye before I can get my loaf. As a regular customer, it really irritates me.
Groupon might make sense for some businesses, but owners have to consider the unintended negative effects the deals can have.
What do you think about the effectiveness of Groupons?
-By Berbay Principal Sharon Berman