Quote:
Originally Posted by TheCanoe
Every single time I use a Groupon anywhere, I end spending at least a small amount more than teething is worth. Usually I end up spending a whole hell of a lot more.
This is like saying "don't ever use coupons or show up anywhere that spends money on advertising if you care about your local economy."
lol no. Groupons are not like coupons. Groupon, based in Chicago, takes at least 50% - and sometimes more - of all the profits a store makes off of the Groupons. Considering the goods or services are already heavily discounted, the company using the Groupon is seeing a sizeable loss in profits with at least half of the profits going to Groupon, based in Chicago and not going back into your local economy.
Of course, the idea is that you are sacrificing these dollars and letting them escape your neighborhood bc you are paying for access to Groupon's considerably vast network to bring in new customers in a way that a simple self-sponsored coupon or special could not. But the reality is so many of the Groupon users are existing customers, out of towners or people who just hop from Groupon to Groupon with no real intention of bringing their business back that it's not profitable for these business in the long run. And, like I said, these dollars are not being put back into your local economy.
From:
http://dylancollins.com/?p=297
Quote:
While half the Internet spent the weekend poring through Groupon’s S1 filing and raised a lot of questions (and concerns), I called up a friend of mine for an extremely interesting chat instead. Ronan Perceval is the CEO of Phorest, the leading beauty salon appointment software company in the UK and Ireland. Their products are used both in salons (appointment management and CRM) and online (for consumer booking). So whenever a salon in the UK or Ireland runs a deal with Groupon, it most likely ends up being processed by Phorest’s software. Here’s what he had to say:
Only about 1% of Groupon users become regular customers.
Groupon represents about 50% of the deals run by our clients. It’s easily the most effective way to get hundreds or even thousands of people through the door of a salon with one day’s advertising. The problem is that the cost of sale doesn’t really add up for the salon owner. Generally a salon only needs to convert about 10% of Groupon buyers into regular clients for it to make financial sense but based on our internal data we’re only seeing conversion rates of about 1%. Think about that for a second. A salon with three staff sells a thousand deals and only ten of these come back again and pay normal prices. That’s over a thousand man hours (at least two months) of loss-making treatments to gain seven new clients.
Another post about Groupon and local economies:
http://allbusiness.sfgate.com/bankin...5634305-1.html
Here's a good story from a bakery owner who used Groupon and it went horribly. Anecdotal, I know, and partially her own fault, but interesting nonetheless:
http://posiescafe.com/wp/?p=316
