1. An offer for "Pay $X for $Y of Z" have at least anecdotally led to people spending $X+(small number) where a lot of those who offer such deals are expecting more (the Gap was a notable example of this). Perhaps a better model is a capped percentage discount on the bill?
2. Evolving social etiquette of tipping. It may simply be that people are unaware that the right thing to do is probably to tip on the undiscounted price. Or it may simply be that those who are inclined to use Groupons are simply cheap. I expect it's a little of both;
3. No caps on offers is a big problem. It means businesses can't budget what are basically marketing expenses. For this to work you need to be able to track individual offers (so a person can't use the same offer twice). This has the added advantage of you being able to mine this data as you know who used an offer, when they did, what they spent, what other offers they've taken and so on;
4. Businesses seem to resent people using these coupons. This I don't get (other than the complaints of wait staff). It's a marketing expense. If a Coolhaus truck can sit a block away from my office in downtown Manhattan giving out free ice cream sandwiches for several days (raising awareness and creating a lot of good will) then you, as a business, owe yourself this: leave the customer happy. If they're unhappy you've just wasted your marketing spend on them; and
5. Having to ask for the offer upfront is BAD. It's awkward. It leads to at least the suspicion of getting smaller portions or otherwise getting the cheap version. It probably means you'll get worse service. The offer should simply be X% off a bill (max value $Y). Exclude alcohol entirely.
Honestly I expect Groupon to sink into the ocean. Businesses don't seem to like it. Consumers are having mixed experiences. The early investors have been paid off with large F/G rounds. Revenue per customer is decreasing. What Groupon is doing isn't exactly rocket science. I kinda see small investors being left with the bill for all this post-IPO.
It's a shame really because I see such things as a great way to promote a restaurant (which is actually hard).
I'll certainly watch the IPO though I won't be participating. My understanding is that they think they have a competitive advantage coming from the Groupon voice https://docs.google.com/View?id=dmv9rbh_2g92x4scj&pli=1&... - the way the write their ads.
1. An offer for "Pay $X for $Y of Z" have at least anecdotally led to people spending $X+(small number) where a lot of those who offer such deals are expecting more (the Gap was a notable example of this). Perhaps a better model is a capped percentage discount on the bill?
2. Evolving social etiquette of tipping. It may simply be that people are unaware that the right thing to do is probably to tip on the undiscounted price. Or it may simply be that those who are inclined to use Groupons are simply cheap. I expect it's a little of both;
3. No caps on offers is a big problem. It means businesses can't budget what are basically marketing expenses. For this to work you need to be able to track individual offers (so a person can't use the same offer twice). This has the added advantage of you being able to mine this data as you know who used an offer, when they did, what they spent, what other offers they've taken and so on;
4. Businesses seem to resent people using these coupons. This I don't get (other than the complaints of wait staff). It's a marketing expense. If a Coolhaus truck can sit a block away from my office in downtown Manhattan giving out free ice cream sandwiches for several days (raising awareness and creating a lot of good will) then you, as a business, owe yourself this: leave the customer happy. If they're unhappy you've just wasted your marketing spend on them; and
5. Having to ask for the offer upfront is BAD. It's awkward. It leads to at least the suspicion of getting smaller portions or otherwise getting the cheap version. It probably means you'll get worse service. The offer should simply be X% off a bill (max value $Y). Exclude alcohol entirely.
Honestly I expect Groupon to sink into the ocean. Businesses don't seem to like it. Consumers are having mixed experiences. The early investors have been paid off with large F/G rounds. Revenue per customer is decreasing. What Groupon is doing isn't exactly rocket science. I kinda see small investors being left with the bill for all this post-IPO.
It's a shame really because I see such things as a great way to promote a restaurant (which is actually hard).