Is Groupon worth it for businesses?
September 21, 2010 6:48 AM Subscribe
Is Groupon worth it for businesses? Depends who you ask. Posies Cafe says no.
For those few who aren't already in the know, Groupon, a Chicago Internet startup, offers one heavily discounted online deal every day to customers around the globe. "We're launching about 200 cities in this next year,'' said Andrew Mason, the 29-year-old CEO and brains behind Groupon. "We have been called the fastest-growing company ever." He has also stated that Groupon is adding 1 million new users each week. Groupon also recently put forth their first national deal as they partnered with Gap.
Is Groupon at a place where small businesses will soon be left in the dust, and only larger corporations can benefit? After Posies Cafe's blog started to garner wider attention, CEO Andrew Mason responded. There has also been a response on the Groupon blog.
For those few who aren't already in the know, Groupon, a Chicago Internet startup, offers one heavily discounted online deal every day to customers around the globe. "We're launching about 200 cities in this next year,'' said Andrew Mason, the 29-year-old CEO and brains behind Groupon. "We have been called the fastest-growing company ever." He has also stated that Groupon is adding 1 million new users each week. Groupon also recently put forth their first national deal as they partnered with Gap.
Is Groupon at a place where small businesses will soon be left in the dust, and only larger corporations can benefit? After Posies Cafe's blog started to garner wider attention, CEO Andrew Mason responded. There has also been a response on the Groupon blog.
Sorry, but the proprietor of that cafe doesn't seem to know how basic discount marketing works. If offering lower-than-cost discounts isn't something that you can work into your marketing plan, then don't do it.
posted by xingcat at 6:55 AM on September 21, 2010 [1 favorite]
posted by xingcat at 6:55 AM on September 21, 2010 [1 favorite]
A friend of a friend whose business is similar to mine offered a Groupon and pulled in several thousand dollars' worth of new business (and potential new, longterm customers) in one day. I'd say it was worth it. Hell, it cost her less than a lameassed display ad and it got people's attention but...more importantly, it motivated them to actually get off their asses and come into her shop.
posted by bitter-girl.com at 6:59 AM on September 21, 2010
posted by bitter-girl.com at 6:59 AM on September 21, 2010
After reading both sides' arguments, it seems that Groupon is a great marketing opportunity, but not a money-maker. Marketing takes money, though, so if you've got it, this seems like a good way to spend it. (Full disclosure: I've used Groupon several times, to my great satisfaction.)
posted by Gilbert at 7:00 AM on September 21, 2010
posted by Gilbert at 7:00 AM on September 21, 2010
It really doesn't sound like she understands how this thing works. As the Groupon CEO points out in his response, Groupon does in fact permit merchants to cap the number of Groupons available. I can confirm this, because I've seen multiple deals with a limited number available. Sounds to me like she didn't adequately research this or her own business needs and got burned.
Take a look at their menu. Almost everything on there is under $13. You could do lunch and a coffee for less than the value of the Groupon. Which means that a significant number of users are going to do that and no more, which is really, really going to hurt your margin. I think a better price point would have been a $3 for $6 deal, which pretty much guarantees that the person is going to have spend another couple of bucks.
Running a small business is hard. Marketing a small business is harder. But don't blame someone else if you don't have a good handle of your own expense structure.
posted by valkyryn at 7:03 AM on September 21, 2010 [22 favorites]
Take a look at their menu. Almost everything on there is under $13. You could do lunch and a coffee for less than the value of the Groupon. Which means that a significant number of users are going to do that and no more, which is really, really going to hurt your margin. I think a better price point would have been a $3 for $6 deal, which pretty much guarantees that the person is going to have spend another couple of bucks.
Running a small business is hard. Marketing a small business is harder. But don't blame someone else if you don't have a good handle of your own expense structure.
posted by valkyryn at 7:03 AM on September 21, 2010 [22 favorites]
The biggest problem here seems to be the fact that there's no limit to the Groupon. If they had sold a couple hundred, the discount marketing might have been worth it.
posted by Plutor at 7:03 AM on September 21, 2010
posted by Plutor at 7:03 AM on September 21, 2010
Vendors should be able to put limits on the amount of product they are willing to sell through Groupon.
posted by MikeF7033 at 7:03 AM on September 21, 2010
posted by MikeF7033 at 7:03 AM on September 21, 2010
Groupon copy is so horribly written that I unsubscribed rather than subject myself to it any longer.
From the Posies Cafe link: " the purpose of this post was to explain to our loyal customers who visit our little cafe 1) why we would not be accepting Groupons after the expiration date"
Is the answer "because they have expired?"
posted by boo_radley at 7:03 AM on September 21, 2010 [16 favorites]
From the Posies Cafe link: " the purpose of this post was to explain to our loyal customers who visit our little cafe 1) why we would not be accepting Groupons after the expiration date"
Is the answer "because they have expired?"
posted by boo_radley at 7:03 AM on September 21, 2010 [16 favorites]
Here in the Chicago area, there was a business called "The Radio Shopping Show" that did the same thing. Gift certificates sold for 50% of their face value, super-deep coupons, and so on. My family was all over it and I ended up carrying around a few of those certificates because, you know -- why not? I ran into a lot of small businesses in te same position -- they'd tried it out as a marketing gimmick, but quickly started hemorrhaging cash trying to honor the coupons.
Many of the heavy users of the certificates were "lifestyle" coupon hunters who swooped in to buy from whatever shop had coupons, and moved on to the next one when the promotion ended. That's not to say that some people didn't use them to discover and evaluate new businesses, but a lot of the shop owners I talked to felt like they'd been sold on a very, very different experience by the folks running the certificate/coupon business. And Groupon, when I started hearing buzz about it, sounded like the same thing.
The hard part, at least in my opinion, is that the businesses with the resources to pull off that kind of deep discount promotion are often the ones with the resources to promote and manage it themselves -- no third party needed.
posted by verb at 7:05 AM on September 21, 2010 [1 favorite]
Many of the heavy users of the certificates were "lifestyle" coupon hunters who swooped in to buy from whatever shop had coupons, and moved on to the next one when the promotion ended. That's not to say that some people didn't use them to discover and evaluate new businesses, but a lot of the shop owners I talked to felt like they'd been sold on a very, very different experience by the folks running the certificate/coupon business. And Groupon, when I started hearing buzz about it, sounded like the same thing.
The hard part, at least in my opinion, is that the businesses with the resources to pull off that kind of deep discount promotion are often the ones with the resources to promote and manage it themselves -- no third party needed.
posted by verb at 7:05 AM on September 21, 2010 [1 favorite]
Cletus: [waving] Hey slow down! I wants to talk to you!
[Homer stops the car]
Cletus: Give us three hundred pretzels.
Marge: [to Homer] You see? A little persistence and patience paid off!
[to Cletus] That'll be three hundred dollars.
Cletus: Hey I don't think so. I got me three hundred coupons.
[Cletus hands an armful of coupons to Marge]
Marge: [growls] I should've said "Limit: one per customer."
Cletus: Should'a but didn't so hand 'em over. Hey! Kids! We're eatin'
dinner tonight!
posted by griphus at 7:05 AM on September 21, 2010 [8 favorites]
[Homer stops the car]
Cletus: Give us three hundred pretzels.
Marge: [to Homer] You see? A little persistence and patience paid off!
[to Cletus] That'll be three hundred dollars.
Cletus: Hey I don't think so. I got me three hundred coupons.
[Cletus hands an armful of coupons to Marge]
Marge: [growls] I should've said "Limit: one per customer."
Cletus: Should'a but didn't so hand 'em over. Hey! Kids! We're eatin'
dinner tonight!
posted by griphus at 7:05 AM on September 21, 2010 [8 favorites]
Plutor: "The biggest problem here seems to be the fact that there's no limit to the Groupon. "
Yeah, supposedly there's a cap on them, but I don't think I'd ever seen one when I was a user. Maybe it just isn't publically displayed?
posted by boo_radley at 7:07 AM on September 21, 2010
Yeah, supposedly there's a cap on them, but I don't think I'd ever seen one when I was a user. Maybe it just isn't publically displayed?
posted by boo_radley at 7:07 AM on September 21, 2010
Yeah, supposedly there's a cap on them, but I don't think I'd ever seen one when I was a user. Maybe it just isn't publically displayed?
There is a cap--if the merchant wants it--and it is publicly displayed. See?
posted by valkyryn at 7:11 AM on September 21, 2010 [1 favorite]
There is a cap--if the merchant wants it--and it is publicly displayed. See?
posted by valkyryn at 7:11 AM on September 21, 2010 [1 favorite]
I've seen 'Sold out!' on a deal before (the last one was on a corn maze, oddly enough) . . . I don't think they tell you about the cap until it's been filled.
posted by dinty_moore at 7:12 AM on September 21, 2010
posted by dinty_moore at 7:12 AM on September 21, 2010
When I see groupon deals for something like Horseback Riding I can't even imagine how the business thinks they are benefiting from the coupon. Like the blog post said, many people get the discount and never come back--that must go twice as much for a non-restaurant.
posted by Potomac Avenue at 7:12 AM on September 21, 2010
posted by Potomac Avenue at 7:12 AM on September 21, 2010
As another point of interest, I also worked for about five years in the retail price/cost management field. Basically, building softare tools to help people manage their ongoing costs and promotional discounts. In that field, at least, it's an article of faith that deep discounts don't get you repeat business and the "loss leader" products don't generate enough additional purchasing to make up for the cost of the discount.
It may be different for other types of businesses, but at least in the ones I'm familiar with the "discount X deep enough, and people will by enough Y to make up for it!" is the Laffer Curve of marketing.
posted by verb at 7:12 AM on September 21, 2010 [3 favorites]
It may be different for other types of businesses, but at least in the ones I'm familiar with the "discount X deep enough, and people will by enough Y to make up for it!" is the Laffer Curve of marketing.
posted by verb at 7:12 AM on September 21, 2010 [3 favorites]
I suspect that really savvy businesses make their Groupons appear to be a much better deal than they are. For example, a local theater company sells tickets for $20. Their recent Groupon was a 4-pack of tickets for $40 - that seems like a 50% discount, right? But if you check their website, they already offer a 4-pack for $60, and even cheaper (ie, $40) if you are a student, a senior citizen, or in the military.
Is the answer "because they have expired?"
I think Groupon encourages businesses to accept expired Groupons "at face value" (ie, if you paid $15 dollars for $30 worth of product or services, but you let the Groupon expire, then the business might still let you exchange it for $15 worth of whatever.
posted by muddgirl at 7:13 AM on September 21, 2010
Is the answer "because they have expired?"
I think Groupon encourages businesses to accept expired Groupons "at face value" (ie, if you paid $15 dollars for $30 worth of product or services, but you let the Groupon expire, then the business might still let you exchange it for $15 worth of whatever.
posted by muddgirl at 7:13 AM on September 21, 2010
I bought tickets to a food tasting event through groupon. The event was poorly planned and overcrowded due to mismanagement. Even though Groupon was not at fault for the poor organization, they still gave us a $10 voucher for the inconvenience. Groupon is okay in my book. I also like saying Groupon. I don't know why. Groupon. Groupon? Groupon.
posted by Think_Long at 7:14 AM on September 21, 2010 [4 favorites]
posted by Think_Long at 7:14 AM on September 21, 2010 [4 favorites]
There is a cap--if the merchant wants it--and it is publicly displayed.
*
This deal ended at:
* 11:59PM
* 09/12/2010
1,796 bought
So your contention was that this deal was capped at 1796 rather that midnight? Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
posted by Potomac Avenue at 7:14 AM on September 21, 2010 [1 favorite]
*
This deal ended at:
* 11:59PM
* 09/12/2010
1,796 bought
So your contention was that this deal was capped at 1796 rather that midnight? Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
posted by Potomac Avenue at 7:14 AM on September 21, 2010 [1 favorite]
When selling a widget below-cost costs you money, don't go looking for a marketing partner to help you sell thousands of those widgets.
posted by Doug Stewart at 7:15 AM on September 21, 2010 [1 favorite]
posted by Doug Stewart at 7:15 AM on September 21, 2010 [1 favorite]
There's definitely a cap available -- I've bought ballet tickets on Groupon, something for which there is obviously a limited supply -- but it's definitely not automatic. I bought a massage Groupon once and couldn't use it for MONTHS because literally every single opening at the spa for 6 weeks was booked up with Groupon appointments within 12 hours. I am pretty sure there was no cap on that one and it probably sucked for that business, too -- it was a 40% discount on the service, and they probably couldn't accommodate any customers paying full-price for weeks.
And I willingly admit that I used the Groupon and never intended to go back to that spa -- not only was it out of my way, but the facilities weren't all that great...I just wasn't impressed. Since then, I've tried to avoid buying Groupons "just because" -- I get the ones for services, experiences, and restaurants I actually want to try. (This is also because I know I'm at least as likely to end up not using a Groupon for something that's out of my way, inconvenient, etc. That's just free money to Groupon, so, no.)
posted by devinemissk at 7:17 AM on September 21, 2010
And I willingly admit that I used the Groupon and never intended to go back to that spa -- not only was it out of my way, but the facilities weren't all that great...I just wasn't impressed. Since then, I've tried to avoid buying Groupons "just because" -- I get the ones for services, experiences, and restaurants I actually want to try. (This is also because I know I'm at least as likely to end up not using a Groupon for something that's out of my way, inconvenient, etc. That's just free money to Groupon, so, no.)
posted by devinemissk at 7:17 AM on September 21, 2010
When selling a widget below-cost costs you money, don't go looking for a marketing partner to help you sell thousands of those widgets.
We'll make it up in volume!
posted by kmz at 7:17 AM on September 21, 2010 [2 favorites]
We'll make it up in volume!
posted by kmz at 7:17 AM on September 21, 2010 [2 favorites]
So your contention was that this deal was capped at 1796 rather that midnight? Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
According to that page, 4 were left (making the total number available 2000 and not the semi-crazy and random number 1796) as of the time expiration.
posted by bitter-girl.com at 7:18 AM on September 21, 2010
According to that page, 4 were left (making the total number available 2000 and not the semi-crazy and random number 1796) as of the time expiration.
posted by bitter-girl.com at 7:18 AM on September 21, 2010
If that's true, verb, then why do the big box stores offer loss leaders almost every week through their circulars? I'm not disputing your claims I'm just wondering about their logic.
posted by 2bucksplus at 7:18 AM on September 21, 2010
posted by 2bucksplus at 7:18 AM on September 21, 2010
So your contention was that this deal was capped at 1796 rather that midnight? Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
It also said "4 remaining"
posted by ghharr at 7:19 AM on September 21, 2010
Looking through the deals they have around here, most of them are people selling something below 50% where the price is arbitrary to start with and there is no incremental cost. For instance, theater or ballet tickets, where they would probably discount that much anyways just to fill the seats.
Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
I think the business owner just got misled by a salesperson. They'll say anything.
posted by smackfu at 7:19 AM on September 21, 2010 [4 favorites]
Perhaps you have a different example, this seems like a time-limit rather than a coupon limit.
I think the business owner just got misled by a salesperson. They'll say anything.
posted by smackfu at 7:19 AM on September 21, 2010 [4 favorites]
Potomac Avenue: It says: "1,796 bought: 4 remaining:
Presumably the cap was at 1,800 deals.
posted by andoatnp at 7:20 AM on September 21, 2010
Presumably the cap was at 1,800 deals.
posted by andoatnp at 7:20 AM on September 21, 2010
According to that page, 4 were left (making the total number available 2000 and not the semi-crazy and random number 1796)
Oh I see durrr, sorry. I think you mean 1800, but yeah either way, it looks like those were capped. I've never seen that before on a groupon.
posted by Potomac Avenue at 7:21 AM on September 21, 2010 [1 favorite]
Oh I see durrr, sorry. I think you mean 1800, but yeah either way, it looks like those were capped. I've never seen that before on a groupon.
posted by Potomac Avenue at 7:21 AM on September 21, 2010 [1 favorite]
I did mean 1800! I woke up 2 hours early today and my math skills are suboptimal at best! :)
posted by bitter-girl.com at 7:25 AM on September 21, 2010
posted by bitter-girl.com at 7:25 AM on September 21, 2010
At least she's not threatening to punch anyone in the dick.
posted by studentbaker at 7:26 AM on September 21, 2010 [2 favorites]
posted by studentbaker at 7:26 AM on September 21, 2010 [2 favorites]
Retailers need to see Groupon (and the other "Groupon clone" social couponing outfits like Living Social) as a marketing channel, not a sales channel. If they see it as a sales channel, as this retailer did, they will go broke. But as a marketing channel, properly used, it can be fantastic, and does work very well for most who try it.
But as valkyryn points out, Posie's didn't do it right (and Groupon should have helped them structure it better). Typical restaurant deals on Groupon set the face value at around 60 percent of the average check. This means almost automatically, there is an upsell when the Groupon is used. Retailers (/restaurateurs) can further increase business by giving out coupons for return visits; capturing email list data, etc. With good deal planning and followthrough, it's not hard for the retailer to make up the discount and break even or profit modestly on the deals, while growing their customer base and reputation.
But to do that they need to treat all those customers like royalty and get them to come back — which Posie's didn't do; they even pissed off one of their loyal customers ("Lucinda") by refusing to honor the Groupon the day after it expired, and they badmouth on their own blog the "many, many terrible Groupon customers" that showed up. I'm sorry, but even if you hate some of your customers you never say that publicly. And this attitude no doubt came through to those customers, from Jessie as well as her staff.
posted by beagle at 7:31 AM on September 21, 2010 [5 favorites]
But as valkyryn points out, Posie's didn't do it right (and Groupon should have helped them structure it better). Typical restaurant deals on Groupon set the face value at around 60 percent of the average check. This means almost automatically, there is an upsell when the Groupon is used. Retailers (/restaurateurs) can further increase business by giving out coupons for return visits; capturing email list data, etc. With good deal planning and followthrough, it's not hard for the retailer to make up the discount and break even or profit modestly on the deals, while growing their customer base and reputation.
But to do that they need to treat all those customers like royalty and get them to come back — which Posie's didn't do; they even pissed off one of their loyal customers ("Lucinda") by refusing to honor the Groupon the day after it expired, and they badmouth on their own blog the "many, many terrible Groupon customers" that showed up. I'm sorry, but even if you hate some of your customers you never say that publicly. And this attitude no doubt came through to those customers, from Jessie as well as her staff.
posted by beagle at 7:31 AM on September 21, 2010 [5 favorites]
Buyers have an insatiable demand for discounted products. Sellers have an insatiable thirst for buyers. When something goes wrong, they each blame the middle man. Where have I heard this before?
posted by jsavimbi at 7:32 AM on September 21, 2010
posted by jsavimbi at 7:32 AM on September 21, 2010
We LOSE money on every sale, but we make it up in VOLUME!
posted by blue_beetle at 7:52 AM on September 21, 2010
posted by blue_beetle at 7:52 AM on September 21, 2010
I think the business owner just got misled by a salesperson. They'll say anything.
Well, based on some of the other things the owner didn't understand, I'm not going to blindly blame the Groupon salesperson.
posted by inigo2 at 7:54 AM on September 21, 2010
Well, based on some of the other things the owner didn't understand, I'm not going to blindly blame the Groupon salesperson.
posted by inigo2 at 7:54 AM on September 21, 2010
Retailers need to see Groupon (and the other "Groupon clone" social couponing outfits like Living Social) as a marketing channel, not a sales channel. If they see it as a sales channel, as this retailer did, they will go broke. But as a marketing channel, properly used, it can be fantastic, and does work very well for most who try it.
I'm surprised that a business owner wouldn't realize this. Isn't that basic coupons 101?
posted by Think_Long at 7:54 AM on September 21, 2010
I'm surprised that a business owner wouldn't realize this. Isn't that basic coupons 101?
posted by Think_Long at 7:54 AM on September 21, 2010
A colleague of mine is a retail consultant who loudly works to get his clients to avoid Groupon. He calls it the "nuclear bomb that kills retail."
Think of the last time you received flowers. Do you remember who gave them to you or the florist?
Exactly, the person who gave them to you.
The person that gives them the flowers is Groupon, you are the forgotten florist.
(Disclosure: I didn't write the story in the link, but I am the editor of the site it's hosted on.)
posted by jbickers at 7:57 AM on September 21, 2010 [4 favorites]
Think of the last time you received flowers. Do you remember who gave them to you or the florist?
Exactly, the person who gave them to you.
The person that gives them the flowers is Groupon, you are the forgotten florist.
(Disclosure: I didn't write the story in the link, but I am the editor of the site it's hosted on.)
posted by jbickers at 7:57 AM on September 21, 2010 [4 favorites]
If that's true, verb, then why do the big box stores offer loss leaders almost every week through their circulars? I'm not disputing your claims I'm just wondering about their logic.I worked in small-item retail, where people either spent small amounts of money or spent a fair amount of money on a large list of small items: the big-box retail dynamics are a lot different for a lot of reasons, both in terms of average single-item price, upselling and margins. I only have experience in a very narrow area, but it seemed like it had some interesting overlap with the Groupon issue being discussed...
posted by verb at 8:16 AM on September 21, 2010
Groupon are salespeople who sell selling itself. That's got to attract the biggest rolex wearing scumbag salesbastards available, so don't be surprised if they lie about the cap rules and try to grab 100% of the revenue and try to fleece every podunk café they can get to answer the phone. And now Groupon are all "oh those aren't the rules, the customer must be stupid or something" when they know full well what's going on.
posted by w0mbat at 8:31 AM on September 21, 2010 [5 favorites]
posted by w0mbat at 8:31 AM on September 21, 2010 [5 favorites]
I'm certainly open to the idea that Groupon isn't for every business or even every business category. But I'm not sure it's incumbent upon the consumer to suss out whether a particular deal is good for a particular business. That's part of the still mostly capitalist system we live in: if something is for sale, it is reasonable to assume that it is listed at a price at which the seller is comfortable.
No one is forcing businesses to offer Groupons. If a business owner doesn't think that he can make it work, he can and should say no. But if a Groupon is offered, consumers should be able to assume that the merchant has done his homework.
But there's something else going on here which hasn't been discussed yet: when does the merchant get the money? When the Groupon is purchased or when it is redeemed? Because if it's the former, the merchant is getting a potentially large some of money right now instead of an indefinite amount of money over the next few months. So the time value of money would need to be taken into account as well.
posted by valkyryn at 8:33 AM on September 21, 2010
No one is forcing businesses to offer Groupons. If a business owner doesn't think that he can make it work, he can and should say no. But if a Groupon is offered, consumers should be able to assume that the merchant has done his homework.
But there's something else going on here which hasn't been discussed yet: when does the merchant get the money? When the Groupon is purchased or when it is redeemed? Because if it's the former, the merchant is getting a potentially large some of money right now instead of an indefinite amount of money over the next few months. So the time value of money would need to be taken into account as well.
posted by valkyryn at 8:33 AM on September 21, 2010
don't be surprised if they lie about the cap rules and try to grab 100% of the revenue and try to fleece every podunk café they can get to answer the phone. And now Groupon are all "oh those aren't the rules, the customer must be stupid or something" when they know full well what's going on.
The customer didn't even realize "margin we mark up is what covers all of our other costs… like staff, rent, utilities, etc". Despite your anger towards salespeople, I don't automatically assume Groupon is lying. If they were, there would certainly be a hell of a lot more stories like this. Are there?
posted by inigo2 at 8:41 AM on September 21, 2010
The customer didn't even realize "margin we mark up is what covers all of our other costs… like staff, rent, utilities, etc". Despite your anger towards salespeople, I don't automatically assume Groupon is lying. If they were, there would certainly be a hell of a lot more stories like this. Are there?
posted by inigo2 at 8:41 AM on September 21, 2010
when does the merchant get the money? When the Groupon is purchased or when it is redeemed? Because if it's the former, the merchant is getting a potentially large some of money right now instead of an indefinite amount of money over the next few months. So the time value of money would need to be taken into account as well.
It's mostly the former - I can't check at this moment because Groupon seems to be getting bombed right now (I'm getting a "something broke" message — you guys broke it!), but I believe that the merchant gets all the money they are due spread out over the first two months. But probably that's when most of the redemptions are also. So there's some cash flow advantage. Also, they get paid whether the coupon is redeemed or not, and there are always some small percentage not redeemed (especially at the lower end of the price spectrum, I suspect).
posted by beagle at 9:02 AM on September 21, 2010
It's mostly the former - I can't check at this moment because Groupon seems to be getting bombed right now (I'm getting a "something broke" message — you guys broke it!), but I believe that the merchant gets all the money they are due spread out over the first two months. But probably that's when most of the redemptions are also. So there's some cash flow advantage. Also, they get paid whether the coupon is redeemed or not, and there are always some small percentage not redeemed (especially at the lower end of the price spectrum, I suspect).
posted by beagle at 9:02 AM on September 21, 2010
I would think that one of the big advantages of Groupons would be that some percentage of purchasers would never redeem their certificates, which is what I believe is commonly referred to as "free money". At the very least, you have a bunch of people lending you money interest free.
posted by electroboy at 9:03 AM on September 21, 2010
posted by electroboy at 9:03 AM on September 21, 2010
I think Groupon encourages businesses to accept expired Groupons "at face value" (ie, if you paid $15 dollars for $30 worth of product or services, but you let the Groupon expire, then the business might still let you exchange it for $15 worth of whatever.
This is correct; in fact, in some states with strict gift certificate laws, that's the law, not optional. In Massachusetts, for example, gift certificates have to be honored for seven years, and even then, legally the retailer needs to turn the funds over to the Unclaimed Property people. But the gift certificate value of the Groupon, beyond the expiration date, is just what you paid for it, as muddgirl sez.
posted by beagle at 9:09 AM on September 21, 2010
This is correct; in fact, in some states with strict gift certificate laws, that's the law, not optional. In Massachusetts, for example, gift certificates have to be honored for seven years, and even then, legally the retailer needs to turn the funds over to the Unclaimed Property people. But the gift certificate value of the Groupon, beyond the expiration date, is just what you paid for it, as muddgirl sez.
posted by beagle at 9:09 AM on September 21, 2010
beagle is right - a retailer needs to think of Groupon as a marketing channel, rather than a sales channel.
I think the issue then becomes, if Groupon is a marketing channel, then what is the marketing message? And the marketing message is a heavily cost-driven one ("get $13 for $6") - so this business is now suddenly competing on price, rather than on whatever its original brand proposition was ("authentic local vegetarian cuisine").
And the problem is, it's rarely a wise strategy for a small business to compete on price.
posted by runkelfinker at 9:11 AM on September 21, 2010 [2 favorites]
I think the issue then becomes, if Groupon is a marketing channel, then what is the marketing message? And the marketing message is a heavily cost-driven one ("get $13 for $6") - so this business is now suddenly competing on price, rather than on whatever its original brand proposition was ("authentic local vegetarian cuisine").
And the problem is, it's rarely a wise strategy for a small business to compete on price.
posted by runkelfinker at 9:11 AM on September 21, 2010 [2 favorites]
runkelfinker, that's exactly what I was trying to stumble around saying earlier. Groupon is marketing, yes -- but the only message being conveyed to prospective customers is "You can get something at our store cheap."
posted by verb at 9:26 AM on September 21, 2010
posted by verb at 9:26 AM on September 21, 2010
Isn't the point of Groupon for businesses to be offering a deal in order to get new customers through their doors, and then hopefully retain a certain number of those as regulars? That's marketing. As such, it should be done sparingly, and in conjunction with other advertising or when announcing a new menu or new facilities, or whatever.
It's not so much competing on price as it is trying to increase exposure through a single discount moment. It's not like they're dropping their regular prices.
The question is, then, whether people who use Groupon actually go to places again, without the discount. Or whether that particular demographic ONLY goes to places where they have a Groupon deal.
I wonder if there are any stats about that online.
posted by hippybear at 9:26 AM on September 21, 2010 [1 favorite]
It's not so much competing on price as it is trying to increase exposure through a single discount moment. It's not like they're dropping their regular prices.
The question is, then, whether people who use Groupon actually go to places again, without the discount. Or whether that particular demographic ONLY goes to places where they have a Groupon deal.
I wonder if there are any stats about that online.
posted by hippybear at 9:26 AM on September 21, 2010 [1 favorite]
Posie's is in my neighborhood. I've been in a few times, and am grateful it's there -- the area has a history of being sketchy and crime-ridden, with lots of empty storefronts now being filled with fun little shops and cafes -- but honestly, I didn't think much of it. I feel like she thinks of the place more as a community gathering-place for hippydippy moms to sit around breastfeeding and discussing which Waldorf school to send their kids to. This in itself is not a bad thing, but it's not conducive to the way I want to enjoy a coffee shop/cafe, i.e., quietly, reading the paper, chatting with my husband, etc.
I guess my point is that it seems like she is more focused on what a wonderful public service her cafe is and less on how to get and keep customers (hence the naivete about Groupon).
Also, it takes way too long to get coffee. Not. Cool.
posted by That's Numberwang! at 9:43 AM on September 21, 2010 [3 favorites]
I guess my point is that it seems like she is more focused on what a wonderful public service her cafe is and less on how to get and keep customers (hence the naivete about Groupon).
Also, it takes way too long to get coffee. Not. Cool.
posted by That's Numberwang! at 9:43 AM on September 21, 2010 [3 favorites]
It's not so much competing on price as it is trying to increase exposure through a single discount moment
I think there are a couple of problems:
1. Groupon is so high profile that a lot of your existing customers are also exposed to the new cost-driven marketing message. They used to think, "authentic local healthy cuisine at a fair price", now they think "cheap and cheerful local healthy food"
2. Meanwhile the new customers come in the door already thinking "cheap and cheerful healthy food". Converting them to "authentic local healthy cuisine at a fair price" is going to be that much harder
I'm not saying Groupon isn't right for lots of businesses that want that exposure, but it doesn't sound like this cafe is one of them...
posted by runkelfinker at 9:51 AM on September 21, 2010 [3 favorites]
I think there are a couple of problems:
1. Groupon is so high profile that a lot of your existing customers are also exposed to the new cost-driven marketing message. They used to think, "authentic local healthy cuisine at a fair price", now they think "cheap and cheerful local healthy food"
2. Meanwhile the new customers come in the door already thinking "cheap and cheerful healthy food". Converting them to "authentic local healthy cuisine at a fair price" is going to be that much harder
I'm not saying Groupon isn't right for lots of businesses that want that exposure, but it doesn't sound like this cafe is one of them...
posted by runkelfinker at 9:51 AM on September 21, 2010 [3 favorites]
I feel like she thinks of the place more as a community gathering-place for hippydippy moms to sit around breastfeeding and discussing which Waldorf school to send their kids to.
Aaaaand this is why she won't be open in a year. Seriously. I've watched enough well-meaning people I know manage to fuck up the "getting money" / "oooh look, I've made a lovely place for everyone to hang out" equation to know that it's not a recipe for success.
posted by bitter-girl.com at 9:57 AM on September 21, 2010
Aaaaand this is why she won't be open in a year. Seriously. I've watched enough well-meaning people I know manage to fuck up the "getting money" / "oooh look, I've made a lovely place for everyone to hang out" equation to know that it's not a recipe for success.
posted by bitter-girl.com at 9:57 AM on September 21, 2010
Groupon is marketing, yes -- but the only message being conveyed to prospective customers is "You can get something at our store cheap."
Not really true. Look at any Groupon offer page. It has a photo, deal details, a detailed and purposely entertaining writeup, links to the retailer's site, reviews, etc. The message being conveyed is the same or better than landing at the retailer's site front page, or walking through the front door. Plus the coupon value. All that humor in the writeup is really Groupon's secret sauce, along with the social distribution of the deals via email, Facebook, etc.
The question is, then, whether people who use Groupon actually go to places again, without the discount. Or whether that particular demographic ONLY goes to places where they have a Groupon deal.
I wonder if there are any stats about that online.
I don't know about that, but Groupon's own stats say that 93 percent of retailers who use it would do it again. Take that with a grain of salt, but it's pretty impressive. Very few traditional marketing outlets can say that about their clients.
posted by beagle at 9:59 AM on September 21, 2010
Not really true. Look at any Groupon offer page. It has a photo, deal details, a detailed and purposely entertaining writeup, links to the retailer's site, reviews, etc. The message being conveyed is the same or better than landing at the retailer's site front page, or walking through the front door. Plus the coupon value. All that humor in the writeup is really Groupon's secret sauce, along with the social distribution of the deals via email, Facebook, etc.
The question is, then, whether people who use Groupon actually go to places again, without the discount. Or whether that particular demographic ONLY goes to places where they have a Groupon deal.
I wonder if there are any stats about that online.
I don't know about that, but Groupon's own stats say that 93 percent of retailers who use it would do it again. Take that with a grain of salt, but it's pretty impressive. Very few traditional marketing outlets can say that about their clients.
posted by beagle at 9:59 AM on September 21, 2010
I think the bigger issue, and one that is being overlooked in this thread is the sense of entitlement this business owner seems to have.
For those that don't know about Portland: There's an area of town, called Mississippi Street, that used to be shabby and sleepy, no shops or places to eat but that has an out of the way record store and a coffee shop right next door. Then, almost overnight, the whole street was awash in stores, restaurants, and condos. Helped in part by the customer base of the record store coupled with proximity to several resources: A community-run 2nd hand lumber yard, inexpensive property value (at the time), music venue, and general inertia of restaurant begets restaurant.
Now there's a similar part of town where Posies is located is called Kenton. It's out there up to the north and no one would casually pass through to get to this area. The hope is that it will turn into another Mississippi street: They have one of the best soul-food restaurants in town and a good art galley/installation/performance space. I give it a 50/50 if it can turn itself into something more, but they need a better coffee shop, a unique record store, and a better music venue than The World Famous Kenton Club.
posted by wcfields at 10:01 AM on September 21, 2010 [1 favorite]
For those that don't know about Portland: There's an area of town, called Mississippi Street, that used to be shabby and sleepy, no shops or places to eat but that has an out of the way record store and a coffee shop right next door. Then, almost overnight, the whole street was awash in stores, restaurants, and condos. Helped in part by the customer base of the record store coupled with proximity to several resources: A community-run 2nd hand lumber yard, inexpensive property value (at the time), music venue, and general inertia of restaurant begets restaurant.
Now there's a similar part of town where Posies is located is called Kenton. It's out there up to the north and no one would casually pass through to get to this area. The hope is that it will turn into another Mississippi street: They have one of the best soul-food restaurants in town and a good art galley/installation/performance space. I give it a 50/50 if it can turn itself into something more, but they need a better coffee shop, a unique record store, and a better music venue than The World Famous Kenton Club.
posted by wcfields at 10:01 AM on September 21, 2010 [1 favorite]
I am a Director of Marketing for an independent restaurant chain. We will never utilize Groupon - it would make us lose money. Yes, it is a marketing cost, but it will not result in long term guests. In my experience, about 90 to 95% of coupon using guests ONLY come in when there is a coupon, and never come back without one. Of that 95%, I would guess about 70% are bad guests...want more of a discount than the coupon offers, don't tip, try to game the system, etc.
So, it just doesn't make sense for us. However, I have purchased Groupon offers myself, so I know it works...
I will also add that the Groupon rep who has been calling me weekly for the last three months is pushy, and gives different answers to the same questions - so I could believe that the Groupon rules were misrepresented by a salesperson, who does not have the polish (and long-term thinking) of the CEO..
posted by Futurehouse at 10:04 AM on September 21, 2010 [9 favorites]
So, it just doesn't make sense for us. However, I have purchased Groupon offers myself, so I know it works...
I will also add that the Groupon rep who has been calling me weekly for the last three months is pushy, and gives different answers to the same questions - so I could believe that the Groupon rules were misrepresented by a salesperson, who does not have the polish (and long-term thinking) of the CEO..
posted by Futurehouse at 10:04 AM on September 21, 2010 [9 favorites]
Groupon is marketing, yes -- but the only message being conveyed to prospective customers is "You can get something at our store cheap."
I see what you're saying, but I think you're confusing a vehicle with a message. Groupon is a vehicle; what you do (and what Groupon does as added value -- presentation and humour on their site) with the coupon, and your customer experience upon redemption, is the message.
Today's Toronto deal, for instance, is $25 for a $50 introduction to kayaking session. Expires October 31. A nice photo of people kayaking.
The plus here for "Humber Kayak Adventures" is that we're in mid-September, well out of the Labour Day bracket that usually caps outdoor activities. They're probably looking at a few weeks of dead spots anyway, so getting $25 is better than getting $0 for all that lag time between now and the onset of winter.
What they want, from this vehicle, is repeat business. They don't want the $25 as much as they want the $50 from a regular-price visit next summer, or the $50 when you buy a session for your brother and his girlfriend as a birthday present, or the $100 when you decide to treat some out-of-town visitors to a fun activity next June.
But I'm not sure they're going to get it: the weather shows Toronto at an average of 18 degrees (68 F) for the next 14 days, and it's all downhill from there. That's borderline comfortable for being out on the water; that plus rain and a bit of a breeze is a miserable afternoon.
So I'm not sure they're going to deliver the experience they need to deliver to turn those $25 one-offs into $50 regulars.
Value erosion -- "you can get stuff from us cheap" -- is the major risk of things like Groupon. My gold standard for this is frozen dinners: as a starving student, and later a starving community radio station manager, I lived off 3/$5 frozen microwavable crap for a while. One or the other of these brands is always on sale. The long-term upshot is I cannot pay full price for a frozen entrée any more (thankfully, being married and better-employed, I no longer have to). If it's not 3/$5, it's a rip-off, regardless of what the "regular price" might be.
So that's a problem with things like Groupon -- if you cycle through it often, you run the risk that all you're going to do is attract a class of client that will buy your loss leader and never reward you with a regular-priced sales cycle. (on preview, see Futurehouse's comment just above as a good example).
But that's counterbalanced by a sort of brinksmanship: if my donut shop is offering $10 in glazed donuts for $5 today, and does that every month for a year, while your donut shop never gives people any incentive to come into your donut shop (except for equally excellent donuts) ever, then I may have a big edge on you. Even if I only retain 20% of my Groupon clients as semi-regulars, I'm still gaining clients via Groupon. I may entice your regulars to come to my shop via Groupon, and they may decide they like my donuts, or atmosphere, or funky music, or hunky donut-serving dude, better. Are those clients worth the Groupon expense? That takes calculators and, more importantly, time. Futurehouse has evaluated the Groupon draw and determined it's a segment that isn't worth the expense of pursuing; other companies will obviously feel differently.
Groupon, as a vehicle, is a mechanism for companies to try to buy and build brand loyalty and repeat business. The risk is that Groupon-savvy clients will never become brand-loyal customers, but rather Groupon customers, flitting from place to place according to where the "deals" are.
But businesses are (generally, over time) smart and adaptive. If Groupon turns out to be a means to only ever get penny-pinching bargoooon hunters into your store, Groupon will eventually turn into the kind of "non-deal called a deal" environment that eBay became once the professional sellers took over. The Futurehouses of the world will phase out, and only the shysters will remain; marking things up to 200% so they can offer them for 50%, offering only pennies on the hundred in terms of real savings, with a lot of extra steps of hassle. It'll either work well, or phase itself out.
posted by Shepherd at 10:11 AM on September 21, 2010 [5 favorites]
I see what you're saying, but I think you're confusing a vehicle with a message. Groupon is a vehicle; what you do (and what Groupon does as added value -- presentation and humour on their site) with the coupon, and your customer experience upon redemption, is the message.
Today's Toronto deal, for instance, is $25 for a $50 introduction to kayaking session. Expires October 31. A nice photo of people kayaking.
The plus here for "Humber Kayak Adventures" is that we're in mid-September, well out of the Labour Day bracket that usually caps outdoor activities. They're probably looking at a few weeks of dead spots anyway, so getting $25 is better than getting $0 for all that lag time between now and the onset of winter.
What they want, from this vehicle, is repeat business. They don't want the $25 as much as they want the $50 from a regular-price visit next summer, or the $50 when you buy a session for your brother and his girlfriend as a birthday present, or the $100 when you decide to treat some out-of-town visitors to a fun activity next June.
But I'm not sure they're going to get it: the weather shows Toronto at an average of 18 degrees (68 F) for the next 14 days, and it's all downhill from there. That's borderline comfortable for being out on the water; that plus rain and a bit of a breeze is a miserable afternoon.
So I'm not sure they're going to deliver the experience they need to deliver to turn those $25 one-offs into $50 regulars.
Value erosion -- "you can get stuff from us cheap" -- is the major risk of things like Groupon. My gold standard for this is frozen dinners: as a starving student, and later a starving community radio station manager, I lived off 3/$5 frozen microwavable crap for a while. One or the other of these brands is always on sale. The long-term upshot is I cannot pay full price for a frozen entrée any more (thankfully, being married and better-employed, I no longer have to). If it's not 3/$5, it's a rip-off, regardless of what the "regular price" might be.
So that's a problem with things like Groupon -- if you cycle through it often, you run the risk that all you're going to do is attract a class of client that will buy your loss leader and never reward you with a regular-priced sales cycle. (on preview, see Futurehouse's comment just above as a good example).
But that's counterbalanced by a sort of brinksmanship: if my donut shop is offering $10 in glazed donuts for $5 today, and does that every month for a year, while your donut shop never gives people any incentive to come into your donut shop (except for equally excellent donuts) ever, then I may have a big edge on you. Even if I only retain 20% of my Groupon clients as semi-regulars, I'm still gaining clients via Groupon. I may entice your regulars to come to my shop via Groupon, and they may decide they like my donuts, or atmosphere, or funky music, or hunky donut-serving dude, better. Are those clients worth the Groupon expense? That takes calculators and, more importantly, time. Futurehouse has evaluated the Groupon draw and determined it's a segment that isn't worth the expense of pursuing; other companies will obviously feel differently.
Groupon, as a vehicle, is a mechanism for companies to try to buy and build brand loyalty and repeat business. The risk is that Groupon-savvy clients will never become brand-loyal customers, but rather Groupon customers, flitting from place to place according to where the "deals" are.
But businesses are (generally, over time) smart and adaptive. If Groupon turns out to be a means to only ever get penny-pinching bargoooon hunters into your store, Groupon will eventually turn into the kind of "non-deal called a deal" environment that eBay became once the professional sellers took over. The Futurehouses of the world will phase out, and only the shysters will remain; marking things up to 200% so they can offer them for 50%, offering only pennies on the hundred in terms of real savings, with a lot of extra steps of hassle. It'll either work well, or phase itself out.
posted by Shepherd at 10:11 AM on September 21, 2010 [5 favorites]
I use Chicago's Groupon all the time for new restaurants (or for something I had already been keeping my eye open for, like a deal on custom framing). I view it as an introduction; a way to try a new restaurant without having to drop a chunk. Do I go back? In this year I have gone back to two places (and one of those two places multiple times), and not gone back to two other places since. The same for restaurant.com. I have discovered MANY new places through them, places I never ever would have considered going to, as I'm the sort to say, "Let's go to our favorite restaurant for the 5th time this month."
The thing I would worry most about, if I were a business, is my waitstaff being stiffed on tips by cheapskates.
posted by Windigo at 10:18 AM on September 21, 2010
The thing I would worry most about, if I were a business, is my waitstaff being stiffed on tips by cheapskates.
posted by Windigo at 10:18 AM on September 21, 2010
Oddly enough, today's Toronto Groupon deal on kayaking offers a guide to a couple of woodland creatures (note Canajun spelling). It's almost as if they were expecting to be criticized on a public forum and were trying to deflect it in advance.
Today's deal is a great excuse to explore wilderness close to home. While you're adventuring, make sure to keep one eye peeled for Sasquatch so that you can feed him from the palm of your hand. The only problem is making sure the noble, majestic sasquatch you're feeding isn't secretly some shifty, craven wendigo. What are some of the key differences?posted by maudlin at 10:44 AM on September 21, 2010 [2 favorites]
Sasquatch: Can learn to communicate with humans through limited sign language and finger-painting.
Wendigo: Can communicate its desire to eat humans more efficiently by not asking permission first.
Sasquatch: Might explain the missing link between man and ape.
Wendigo: Might explain the missing choir group that never returned from its field trip to Black Snow Ridge.
Sasquatch: A friend to man and beast, it is not uncommon to see them seated in a meadow, twirling a freshly plucked daisy.
Wendigo: Only learned enough English to cuss.
are people seriously debating this as if it were a new concept? it's fucking coupons, guys. just because it's on the internet doesn't make it revolutionary or anything.
posted by fallacy of the beard at 10:56 AM on September 21, 2010 [1 favorite]
posted by fallacy of the beard at 10:56 AM on September 21, 2010 [1 favorite]
It really doesn't sound like she understands how this thing works. As the Groupon CEO points out in his response, Groupon does in fact permit merchants to cap the number of Groupons available. I can confirm this, because I've seen multiple deals with a limited number available. Sounds to me like she didn't adequately research this or her own business needs and got burned.My guess is the sales guy mislead her about the actual policies, and probably works on commission.
She probably would have gotten even more publicity if she'd just given away free meals.
Many of the heavy users of the certificates were "lifestyle" coupon hunters who swooped in to buy from whatever shop had coupons, and moved on to the next one when the promotion ended.And in this case, throw in all the people who even tried to scam groupon and pay the shop even less, knowing that groupon was taking a cut.
Today's Toronto deal, for instance, is $25 for a $50 introduction to kayaking session. Expires October 31. A nice photo of people kayaking.But the thing is, the $25 and the $3/5 are the real price of the item. Just because something is on sale at a grocery store doesn't man that they're losing money on it. Or much money on it.
...
I lived off 3/$5 frozen microwavable crap for a while. One or the other of these brands is always on sale. The long-term upshot is I cannot pay full price for a frozen entrée any more (thankfully, being married and better-employed, I no longer have to). If it's not 3/$5, it's a rip-off, regardless of what the "regular price" might be.
posted by delmoi at 11:02 AM on September 21, 2010 [1 favorite]
My guess is the sales guy mislead her about the actual policies, and probably works on commission.
My guess is that she didn't understand, and wanted to sell as many as possible, because sales = money.
(Huh. It's easy to blame people without knowing the facts.)
posted by inigo2 at 11:06 AM on September 21, 2010
My guess is that she didn't understand, and wanted to sell as many as possible, because sales = money.
(Huh. It's easy to blame people without knowing the facts.)
posted by inigo2 at 11:06 AM on September 21, 2010
Groupon is awesome. I've seen caps on products a few times. See also:
LivingSocial
Tippr
posted by P.o.B. at 11:22 AM on September 21, 2010
LivingSocial
Tippr
posted by P.o.B. at 11:22 AM on September 21, 2010
I now only buy Groupons for local places I already shop.
I had bought a Groupon in the past for a bag retailer. Confusion over what the Groupon could be used on made me sell it. I believe there were miscommunications between Groupon and the retailer and that Groupon representatives made conflicting statements to customers. Only after a lot of complaints and push back did Groupon offer to refunds to dissatisfied customers. I emailed both companies requesting written clarification and never heard back. It made me think badly of both companies.
posted by oneear at 11:31 AM on September 21, 2010
I had bought a Groupon in the past for a bag retailer. Confusion over what the Groupon could be used on made me sell it. I believe there were miscommunications between Groupon and the retailer and that Groupon representatives made conflicting statements to customers. Only after a lot of complaints and push back did Groupon offer to refunds to dissatisfied customers. I emailed both companies requesting written clarification and never heard back. It made me think badly of both companies.
posted by oneear at 11:31 AM on September 21, 2010
I'd signed up for Groupon forever ago but honestly hadn't ever purchased one because money's been tight since I signed up (yes, I know that's a contradiction) but recently they had a $10 Jamba Juice coupon for $5. Jamba Juice is something I do enjoy so I felt like, even though the coupon required you to buy a lunch product as part of your purchase, I felt like it was a good deal because, hey it was just the same as buying the sandwich I wouldn't get (but you've got to eat) with the juice for free. Or "free."
But after buying it, I forgot about it until just before the day it was expiring (last Saturday), so on Friday, I went to the site to print it out and made the mistake of reading the comments and was met with all of these people complaining about having to buy a lunch product rather than just juice, even though it was clearly part of the deal, or the Groupon not being taken by all locations -- even though they clearly communicated that it was only certain Chicagoland stores who were participating. Obviously, Jamba Juice decided to do this to promote their food, not because they have trouble getting people into the stores. But that didn't matter. It was like they had a RIGHT to these discounts their way. It was creepy.
Of course, since I was using the Groupon on the last possible moment, when I got to my local Jamba Juice, I ended up in line with someone doing the same thing. And he was the same entitled idiot who was upset he had to add in his own $1.67 because the sandwich he got (the most expensive lunch item) plus (more expensive) juice choice was $11.67. The woman at the counter was so pleasant the whole time, but you could see this had been happening a lot.
I'm not sure I'll be using Groupon again, not because I don't think it's a great idea and perhaps a helpful company marketing-wise but because I don't want to be lumped in with those kind of people. If this is what it means to be a smart shopper, I'll keep packing my lunch.
posted by MCMikeNamara at 11:37 AM on September 21, 2010 [5 favorites]
But after buying it, I forgot about it until just before the day it was expiring (last Saturday), so on Friday, I went to the site to print it out and made the mistake of reading the comments and was met with all of these people complaining about having to buy a lunch product rather than just juice, even though it was clearly part of the deal, or the Groupon not being taken by all locations -- even though they clearly communicated that it was only certain Chicagoland stores who were participating. Obviously, Jamba Juice decided to do this to promote their food, not because they have trouble getting people into the stores. But that didn't matter. It was like they had a RIGHT to these discounts their way. It was creepy.
Of course, since I was using the Groupon on the last possible moment, when I got to my local Jamba Juice, I ended up in line with someone doing the same thing. And he was the same entitled idiot who was upset he had to add in his own $1.67 because the sandwich he got (the most expensive lunch item) plus (more expensive) juice choice was $11.67. The woman at the counter was so pleasant the whole time, but you could see this had been happening a lot.
I'm not sure I'll be using Groupon again, not because I don't think it's a great idea and perhaps a helpful company marketing-wise but because I don't want to be lumped in with those kind of people. If this is what it means to be a smart shopper, I'll keep packing my lunch.
posted by MCMikeNamara at 11:37 AM on September 21, 2010 [5 favorites]
The thing I would worry most about, if I were a business, is my waitstaff being stiffed on tips by cheapskates.
Funny how sociology works even when participating in an online activity. For the most part, individual customers, sans coupons, will tip as they always do in that 15% - 25% bracket, but groups of people, say a pub crawl, wedding, funeral or that odious "opening night" crowd will invariably stiff the service as if they're now part of some higher group who has no need for social convention. As if they're doing you a favor for being there. Kind of like a mob mentality. The cheaper something is, the less perceived value it has, the more I can forget my manners and shift responsibility to that other entity: the group. Here's a dollar for those eight shots and that frozen mudslide I just put you in the weeds with.
I wouldn't say that I'm surprised by it, but it does tweak me a little that people will inevitably behave as such. Maybe the Posie lady thought that she'd just be getting more business from the type of people she wished she was doing business with and not the Dunkin' Donuts crowd. It's no wonder the brand-conscious businesses stay away from the unwashed masses.
posted by jsavimbi at 11:48 AM on September 21, 2010
Funny how sociology works even when participating in an online activity. For the most part, individual customers, sans coupons, will tip as they always do in that 15% - 25% bracket, but groups of people, say a pub crawl, wedding, funeral or that odious "opening night" crowd will invariably stiff the service as if they're now part of some higher group who has no need for social convention. As if they're doing you a favor for being there. Kind of like a mob mentality. The cheaper something is, the less perceived value it has, the more I can forget my manners and shift responsibility to that other entity: the group. Here's a dollar for those eight shots and that frozen mudslide I just put you in the weeds with.
I wouldn't say that I'm surprised by it, but it does tweak me a little that people will inevitably behave as such. Maybe the Posie lady thought that she'd just be getting more business from the type of people she wished she was doing business with and not the Dunkin' Donuts crowd. It's no wonder the brand-conscious businesses stay away from the unwashed masses.
posted by jsavimbi at 11:48 AM on September 21, 2010
Just because something is on sale at a grocery store doesn't man that they're losing money on it. Or much money on it.Again, as someone who worked in that field specifically I can say that they usually are losing money, or would be if the sales weren't underwritten by the manufacturers. For most of the everyday items people purchase, grocery stores operate on a 1-3% profit margin. The average coupon cuts way below that; many grocery stores only offer specials when the manufacturer is passing promotional cash on to them, and most coupons are from the manufacturers themselves rather than the grocery stores, because there is just not way to make the numbers add up.
One coffee company, for example, might try to lure customers away from its competitors with coupons. But putting "coffee" on sale for a week at one grocery store is unlikely to lure many customers over in any long-term fashion.
Again, this is not the same as service industries, restaurants, and many other kinds of businesses that are better candidates for Groupon. But IMO, coupon clearinghouse services are the SEO Optimization of offline sales and marketing. For every legitimate situations where they make sense there is a company out there trying to collect cash by exploiting the naivete of small business owners.
posted by verb at 11:53 AM on September 21, 2010
Again, as someone who worked in that field specifically I can say that they usually are losing money, or would be if the sales weren't underwritten by the manufacturers. For most of the everyday items people purchase, grocery stores operate on a 1-3% profit margin. The average coupon cuts way below that; many grocery stores only offer specials when the manufacturer is passing promotional cash on to them, and most coupons are from the manufacturers themselves rather than the grocery stores, because there is just not way to make the numbers add up.
Seconding (sort of): I work on the advertising end of things (but in Canada, where things are a little different), and generally with consumer packaged goods, the coupon has a unique bar code that's scanned for the rebate; the stores "pass the savings on to you" at the moment, and get reimbursed for code scans (or physically mail coupon batches back) on a regular basis. It's a pain in the ass in some ways, as it costs a lot to generate one of these one-off UPCs, so a lot of cool things you could maybe do (such as track which coupons come from online vs. which are flyer vs. which are in-store with different UPCs) automatically are really expensive -- the stores, for one thing, have to program all the registers to recognize the UPCs, and that's just the tip of it.
Stores run loss leaders and door crashers, but those are to get you in the door: the last thing they want is for you to go in, buy the five pounds of apples for $1, and go back out. They're banking on you picking up diapers and jam and some Coke and a pack of cigarettes while you're there.
Addressing the original point of
But the thing is, the $25 and the $3/5 are the real price of the item.
Without getting into a lot of semantics about what "real price" means, you can generally assume that when a coupon offers a discount on something physical (a frozen dinner, say) as opposed to an experience (kayaking), the manufacturer is losing money on the sale, or at least drastically reducing profit. The $3/5 frozen meal probably means the manufacturer is losing money, but it might be worth it for a few reasons:
- Bumps: elevate raw sales numbers to achieve or maintain an industry-leading position (or to ensure a brand manager gets a nice bonus -- sad but true);
- Conversion: attempt to switch consumers from another brand to yours;
- Penetration: attempt to convince people who don't buy your type of product to try it;
- Diversion: starve competitors at a vulnerable moment, i.e. if they're on the ropes, or launching a new product, you may want to lose money just to keep people from buying their product.
So the manufacturer is giving you an incentive to buy their product, but what they're selling the product for might be below cost. And the nightmare scenario is when you get a group of competitors in a brand environment without a lot of differentiation from one brand to the next (peanut butter, say) where they effectively alternate a discount, and consumers become mercenaries that follow the discount rather than stay brand-loyal.
A nightmare because if you have Brand A, B, C and D rotating a below-cost discount on a regular basis, the consumer begins to perceive the value of the product as less valuable than what it costs to make. Suddenly, nobody buys a $5 jar of peanut butter because some brand has been $3, constantly, for like ever. On the rare week that there are no peanut butter specials, people wait until the next week rather than pay "too much" (which is actually the "real", i.e. the price point that was established as a sensible addition of cost + profit, price). It's like mutual assured destruction for consumer goods. Ever notice that you'll have bought half-off salad dressing spanning about four different brands for six months, and then suddenly there's no sales on salad dressing for about 12 weeks? That's because the various parties involved have freaked out. Détente, then a peak season will roll around (spring = salads = dressing!) and the war will begin anew.
Traditional coupons hurt in a very real financial way for brands: first and foremost, they eat up a huge chunk of a marketing budget (if you're moving 100,000 units of something per month, and you offer a $1 coupon at shelf, figure you're burning at least 20%, or $20,000, of lost revenue in redemption alone). For that $20,000, you could have bought a few TV spots, or a belly band on a mid-run magazine, or run a contest with a $10,000 grand prize and used your shelftalkers to run a tear pad of entry forms instead of the coupon. So there's an opportunity cost with a coupon as well as the actual money lost in reimbursement, plus all the regular painful things: planning, printing, negotiating with stores for placement, etc.
That's for at-shelf consumer goods, obviously, while Groupon seems to specialize a lot more in harder to quantify stuff like restaurants, bars, etc. It's a lot fuzzier to figure out the mark-up on some of this stuff, but it just takes more work. You gotta figure out your opportunity costs as well as the actual Groupon costs, though: if you're going to move 1000 more sandwiches but you're losing $1 per sandwich, what else could you have done with that $1000 in terms of attracting new business or increasing existing business?
posted by Shepherd at 12:38 PM on September 21, 2010 [19 favorites]
Seconding (sort of): I work on the advertising end of things (but in Canada, where things are a little different), and generally with consumer packaged goods, the coupon has a unique bar code that's scanned for the rebate; the stores "pass the savings on to you" at the moment, and get reimbursed for code scans (or physically mail coupon batches back) on a regular basis. It's a pain in the ass in some ways, as it costs a lot to generate one of these one-off UPCs, so a lot of cool things you could maybe do (such as track which coupons come from online vs. which are flyer vs. which are in-store with different UPCs) automatically are really expensive -- the stores, for one thing, have to program all the registers to recognize the UPCs, and that's just the tip of it.
Stores run loss leaders and door crashers, but those are to get you in the door: the last thing they want is for you to go in, buy the five pounds of apples for $1, and go back out. They're banking on you picking up diapers and jam and some Coke and a pack of cigarettes while you're there.
Addressing the original point of
But the thing is, the $25 and the $3/5 are the real price of the item.
Without getting into a lot of semantics about what "real price" means, you can generally assume that when a coupon offers a discount on something physical (a frozen dinner, say) as opposed to an experience (kayaking), the manufacturer is losing money on the sale, or at least drastically reducing profit. The $3/5 frozen meal probably means the manufacturer is losing money, but it might be worth it for a few reasons:
- Bumps: elevate raw sales numbers to achieve or maintain an industry-leading position (or to ensure a brand manager gets a nice bonus -- sad but true);
- Conversion: attempt to switch consumers from another brand to yours;
- Penetration: attempt to convince people who don't buy your type of product to try it;
- Diversion: starve competitors at a vulnerable moment, i.e. if they're on the ropes, or launching a new product, you may want to lose money just to keep people from buying their product.
So the manufacturer is giving you an incentive to buy their product, but what they're selling the product for might be below cost. And the nightmare scenario is when you get a group of competitors in a brand environment without a lot of differentiation from one brand to the next (peanut butter, say) where they effectively alternate a discount, and consumers become mercenaries that follow the discount rather than stay brand-loyal.
A nightmare because if you have Brand A, B, C and D rotating a below-cost discount on a regular basis, the consumer begins to perceive the value of the product as less valuable than what it costs to make. Suddenly, nobody buys a $5 jar of peanut butter because some brand has been $3, constantly, for like ever. On the rare week that there are no peanut butter specials, people wait until the next week rather than pay "too much" (which is actually the "real", i.e. the price point that was established as a sensible addition of cost + profit, price). It's like mutual assured destruction for consumer goods. Ever notice that you'll have bought half-off salad dressing spanning about four different brands for six months, and then suddenly there's no sales on salad dressing for about 12 weeks? That's because the various parties involved have freaked out. Détente, then a peak season will roll around (spring = salads = dressing!) and the war will begin anew.
Traditional coupons hurt in a very real financial way for brands: first and foremost, they eat up a huge chunk of a marketing budget (if you're moving 100,000 units of something per month, and you offer a $1 coupon at shelf, figure you're burning at least 20%, or $20,000, of lost revenue in redemption alone). For that $20,000, you could have bought a few TV spots, or a belly band on a mid-run magazine, or run a contest with a $10,000 grand prize and used your shelftalkers to run a tear pad of entry forms instead of the coupon. So there's an opportunity cost with a coupon as well as the actual money lost in reimbursement, plus all the regular painful things: planning, printing, negotiating with stores for placement, etc.
That's for at-shelf consumer goods, obviously, while Groupon seems to specialize a lot more in harder to quantify stuff like restaurants, bars, etc. It's a lot fuzzier to figure out the mark-up on some of this stuff, but it just takes more work. You gotta figure out your opportunity costs as well as the actual Groupon costs, though: if you're going to move 1000 more sandwiches but you're losing $1 per sandwich, what else could you have done with that $1000 in terms of attracting new business or increasing existing business?
posted by Shepherd at 12:38 PM on September 21, 2010 [19 favorites]
Is Poupon good for hamburgers? Fox News says no.
posted by Ratio at 12:43 PM on September 21, 2010 [1 favorite]
posted by Ratio at 12:43 PM on September 21, 2010 [1 favorite]
I found two phenomenal local resaurants through Groupon. I ended up spending extra cash there and tipping well, and plan to go back as soon as I'm not broke. Win/win in this specific anecdotal case?
Also, I just saw a groupon a few days ago for an online wine place. 25 dollars for 75 in wine. Boggled my mind.
posted by thsmchnekllsfascists at 12:44 PM on September 21, 2010
Also, I just saw a groupon a few days ago for an online wine place. 25 dollars for 75 in wine. Boggled my mind.
posted by thsmchnekllsfascists at 12:44 PM on September 21, 2010
When I see groupon deals for something like Horseback Riding I can't even imagine how the business thinks they are benefiting from the coupon. Like the blog post said, many people get the discount and never come back--that must go twice as much for a non-restaurant.
But the marginal cost of Horseback Riding or any kind of service is much lower-- without a customer, a service provider is just sitting around still having to pay rent and other overhead, so a flood of new customers gives the service provider more stuff to do, just as a lower billing rate during the groupon period losing nothing but their time, and the hope is that some of those groupon users will turn into regular, full-fare-paying customers.
When it comes to retail, however, sellers need to actually cover the costs of the physical goods they're providing, and in many cases time spent with money-losing customers is time that could have been spent dealing with paying ones. Groupon may be so expensive that the retailer/restaurant/café might as well just put an ad in the paper announcing free stuff/food and it will probably be cheaper.
posted by deanc at 12:55 PM on September 21, 2010
But the marginal cost of Horseback Riding or any kind of service is much lower-- without a customer, a service provider is just sitting around still having to pay rent and other overhead, so a flood of new customers gives the service provider more stuff to do, just as a lower billing rate during the groupon period losing nothing but their time, and the hope is that some of those groupon users will turn into regular, full-fare-paying customers.
When it comes to retail, however, sellers need to actually cover the costs of the physical goods they're providing, and in many cases time spent with money-losing customers is time that could have been spent dealing with paying ones. Groupon may be so expensive that the retailer/restaurant/café might as well just put an ad in the paper announcing free stuff/food and it will probably be cheaper.
posted by deanc at 12:55 PM on September 21, 2010
I have yet to see a Groupon for a pure retail outlet in the kind of low margin line of business that verb and Shepherd describe. They're almost always for things like restaurants, where the margins are much, much higher, sometimes by an order of magnitude. So while I'd completely agree that the model is not appropriate for your traditional retail outlet who is basically selling a product at the smallest margin possible to maintain a profit, merchants who sell service as much as they do product can probably absorb this kind of loss leader.
Let me qualify that by saying that I'm deeply suspicious about the ability of anyone to calculate ROI for marketing expenses with any kind of serious rigor. All you know is how much a promotion has cost you. Figuring out how much it has actually made you is, as far as I can tell, next to impossible, despite the mountains of ink and money spent on marketing and marketing education in today's society.
posted by valkyryn at 12:58 PM on September 21, 2010 [1 favorite]
Let me qualify that by saying that I'm deeply suspicious about the ability of anyone to calculate ROI for marketing expenses with any kind of serious rigor. All you know is how much a promotion has cost you. Figuring out how much it has actually made you is, as far as I can tell, next to impossible, despite the mountains of ink and money spent on marketing and marketing education in today's society.
posted by valkyryn at 12:58 PM on September 21, 2010 [1 favorite]
Groupon may be so expensive that the retailer/restaurant/café might as well just put an ad in the paper announcing free stuff/food and it will probably be cheaper.Yes, but that would leave Groupon out in the cold. From the original linked article:
I spoke with John, a Groupon rep, and we started formulating the idea.... John told me that when the consumer pays less than $10, Groupon usually takes 100% of the money. What?! He reassured me that most customer buy more than the $13, and that we would never have to advertise again after taking advantage of their network.Read that one over a couple of times.
posted by verb at 1:02 PM on September 21, 2010 [2 favorites]
I have yet to see a Groupon for a pure retail outlet in the kind of low margin line of business that verb and Shepherd describe. They're almost always for things like restaurants, where the margins are much, much higher, sometimes by an order of magnitude.Yeah, and I hope that I've made that clear in my posts -- my experience is definitely with low-margin high-volume stuff. For better or worse, though, the lessons that I learned there are hard to unlearn. In my experience, "Give your product away to get people in the door; they'll buy more later!" is a losing game when you have a high marginal cost. The difference between a 5% profit margin and a 20% profit margin is meaningless if someone brings in a $15 gift certificate that they didn't even pay you for -- they paid Groupon.
Anyways, I don't mean to rag on Groupon or suggest that I know something terrible about their business. I just have a lot of sympathy with business owners who make the wrong call on this and realize that the numbers don't work.
posted by verb at 1:09 PM on September 21, 2010
If you buy one thing at a coffeeshop, it's probably a drink, which has a high profit margin. If you buy two things, the second is probably a pastry, which has a lower profit margin. So increasing the size of the check may actually be against your best interests.
posted by smackfu at 1:10 PM on September 21, 2010 [1 favorite]
posted by smackfu at 1:10 PM on September 21, 2010 [1 favorite]
If you're a hair salon, spa, dermatologist, plastic surgeon, dentist or similar, Groupon is also a great way for you to gain customers on whom to train your less experienced staff. In that case repeat business would of course be secondary to your main goal.
posted by Dragonness at 1:16 PM on September 21, 2010 [1 favorite]
posted by Dragonness at 1:16 PM on September 21, 2010 [1 favorite]
Yes, but that would leave Groupon out in the cold. From the original linked article:
But also read Groupon's response, where they say that's not the case at all:
"This is not true – we don’t take 100%. I’m trying to get to the bottom of where that came from, but this is in no way our policy."
posted by inigo2 at 1:17 PM on September 21, 2010
But also read Groupon's response, where they say that's not the case at all:
"This is not true – we don’t take 100%. I’m trying to get to the bottom of where that came from, but this is in no way our policy."
posted by inigo2 at 1:17 PM on September 21, 2010
But also read Groupon's response, where they say that's not the case at all:Thanks -- I missed that one, and I have the strong suspicion that may have come from an agressive sales rep. If Groupon's cut is in any way negotiable, there will be sales reps out there trying to get 100% of the cut; that's a fact.
"This is not true – we don’t take 100%. I’m trying to get to the bottom of where that came from, but this is in no way our policy."
posted by verb at 1:22 PM on September 21, 2010
Let me qualify that by saying that I'm deeply suspicious about the ability of anyone to calculate ROI for marketing expenses with any kind of serious rigor. All you know is how much a promotion has cost you. Figuring out how much it has actually made you is, as far as I can tell, next to impossible, despite the mountains of ink and money spent on marketing and marketing education in today's society.
Oh man, if anybody could, the entire ad industry would be screwwwwwed. If there was something with provable ROI, everyone would do it and nobody in advertising would have a job any more. Mind you, then some jerk would break it and we'd all be back at work again.
As much as there's a lot of science in advertising, and endless surveys and focus groups and number-crunching, it's still mostly voodoo: "X has worked with Y results in Z previous similar instances, so we think it will probably do the same for you" is the most honest you can ever be with a client. If an agency "guarantees" ROI, offer them 50% up front and the rest pegged as a percentage of your actual returns after the fact. Hilarity ensues.
To accurately calculate ROI on just a Groupon campaign for a restaurant, for instance, you'd have to have:
1. The Groupon costs. That's easy.
2. Money earned on Groupon-sourced coupon redemption visits.
3. Minus money "lost" by the redemption value of coupons used. We're still in the pretty-easy territory.
4. Unfailing and perfect knowledge of which Groupon redemption customers will return, and when, how much they'll spend when they come back, and the kind of cosmic awareness that can tell you whether they ever would have come without the Groupon offer.
5. Some sort of metric for the penetration value of people seeing the Groupon offer, not acting on it, but retaining your name and service somewhere in their memory.
6. Some sort of metric for the word of mouth generated by people who have visited, thanks to the Groupon offer, enjoyed their experience, and are telling others about it. Were I a New Yorker, for instance, I'd buy the hell out of whatever Greg Nog was talking about up there.
7. A good sense of the stressors created by Groupon coupon redeemers: have they inconvenienced good existing customers, consumed lots of other resources, or otherwise cost you in terms of either immediate spending or long-term effects.
I'd argue that 1-3, together, in the absence of any other concurrent or recent promotions, can give you a good idea of what ROI is on a single Groupon campaign. If your focus is on upselling (get 'em in for the $1 watermelon, then convince them to buy the $20 melon baller!) or killing off either dead time or overstock (I have $400 of steak that I ordered by accident, so I better unload it before it rots; we never do any business on Tuesday nights, so let's put our least popular menu items up for half-off as a what-the-hell move), I think you can pull some numbers out that show you whether it was worth it.
But if your goal is long-term loyal business, after Point Three you might as well don your wizard hat and start casting chicken entrails.
posted by Shepherd at 1:35 PM on September 21, 2010 [1 favorite]
Oh man, if anybody could, the entire ad industry would be screwwwwwed. If there was something with provable ROI, everyone would do it and nobody in advertising would have a job any more. Mind you, then some jerk would break it and we'd all be back at work again.
As much as there's a lot of science in advertising, and endless surveys and focus groups and number-crunching, it's still mostly voodoo: "X has worked with Y results in Z previous similar instances, so we think it will probably do the same for you" is the most honest you can ever be with a client. If an agency "guarantees" ROI, offer them 50% up front and the rest pegged as a percentage of your actual returns after the fact. Hilarity ensues.
To accurately calculate ROI on just a Groupon campaign for a restaurant, for instance, you'd have to have:
1. The Groupon costs. That's easy.
2. Money earned on Groupon-sourced coupon redemption visits.
3. Minus money "lost" by the redemption value of coupons used. We're still in the pretty-easy territory.
4. Unfailing and perfect knowledge of which Groupon redemption customers will return, and when, how much they'll spend when they come back, and the kind of cosmic awareness that can tell you whether they ever would have come without the Groupon offer.
5. Some sort of metric for the penetration value of people seeing the Groupon offer, not acting on it, but retaining your name and service somewhere in their memory.
6. Some sort of metric for the word of mouth generated by people who have visited, thanks to the Groupon offer, enjoyed their experience, and are telling others about it. Were I a New Yorker, for instance, I'd buy the hell out of whatever Greg Nog was talking about up there.
7. A good sense of the stressors created by Groupon coupon redeemers: have they inconvenienced good existing customers, consumed lots of other resources, or otherwise cost you in terms of either immediate spending or long-term effects.
I'd argue that 1-3, together, in the absence of any other concurrent or recent promotions, can give you a good idea of what ROI is on a single Groupon campaign. If your focus is on upselling (get 'em in for the $1 watermelon, then convince them to buy the $20 melon baller!) or killing off either dead time or overstock (I have $400 of steak that I ordered by accident, so I better unload it before it rots; we never do any business on Tuesday nights, so let's put our least popular menu items up for half-off as a what-the-hell move), I think you can pull some numbers out that show you whether it was worth it.
But if your goal is long-term loyal business, after Point Three you might as well don your wizard hat and start casting chicken entrails.
posted by Shepherd at 1:35 PM on September 21, 2010 [1 favorite]
Sounds like groupon's got some skeeziness at the 2nd line.
posted by boo_radley at 1:50 PM on September 21, 2010
posted by boo_radley at 1:50 PM on September 21, 2010
There are two types of policy, I think: Your official corporate line, as exemplified by the mutterings of your CEO and such folk, and the "real" corporate line, which is what your salespeople use to close deals. In an ethical company, these should not diverge; if you consider yourself an ethical company and they do you need to look at fixing your sales department.
posted by maxwelton at 2:23 PM on September 21, 2010 [3 favorites]
posted by maxwelton at 2:23 PM on September 21, 2010 [3 favorites]
In an ethical company, these should not diverge
I have yet to work at one of these.
posted by josher71 at 3:18 PM on September 21, 2010 [2 favorites]
I have yet to work at one of these.
posted by josher71 at 3:18 PM on September 21, 2010 [2 favorites]
are people seriously debating this as if it were a new concept? it's fucking coupons, guys. just because it's on the internet doesn't make it revolutionary or anything.
It's social couponing, which is as different from regular old couponing as Facebook is from first class mail.
And, what with competition from Living Social and all the rest, eventually retailers will get 80-90 percent, not 50 percent, of what the consumer pays. Bad for Groupon et al, good for retailers.
posted by beagle at 5:59 PM on September 21, 2010 [1 favorite]
It's social couponing, which is as different from regular old couponing as Facebook is from first class mail.
And, what with competition from Living Social and all the rest, eventually retailers will get 80-90 percent, not 50 percent, of what the consumer pays. Bad for Groupon et al, good for retailers.
posted by beagle at 5:59 PM on September 21, 2010 [1 favorite]
When using a coupon, the appropriate tip is the amount normally given on the whole cost before discount.
To me it's different than if the restaurant has a special sale price within its own menu. Specials are there to encourage new diners to visit or to give regulars a chance to try something else, and although a coupon also encourages new diners, it also goes way beyond the discount of a special.
The people who lose the most are the servers, who still must work hard to please the customer but earn less when people feel the coupon means they can get away with tipping less.
Servers must cringe when they see coupons being hauled out.
posted by bwg at 6:49 PM on September 21, 2010
To me it's different than if the restaurant has a special sale price within its own menu. Specials are there to encourage new diners to visit or to give regulars a chance to try something else, and although a coupon also encourages new diners, it also goes way beyond the discount of a special.
The people who lose the most are the servers, who still must work hard to please the customer but earn less when people feel the coupon means they can get away with tipping less.
Servers must cringe when they see coupons being hauled out.
posted by bwg at 6:49 PM on September 21, 2010
That's one of those things where it would be the case in a perfect world, but waiters are just setting themselves up for disappointment by expecting it.
posted by smackfu at 7:13 PM on September 21, 2010
posted by smackfu at 7:13 PM on September 21, 2010
Servers must cringe when they see coupons being hauled out.
Boy, howdy.
posted by jcking77 at 9:38 PM on September 21, 2010
Boy, howdy.
posted by jcking77 at 9:38 PM on September 21, 2010
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