11 responses

  1. SorryIdidit
    September 17, 2013

    This was the WORST business decision I have ever made. I am here to warn small business owners to NOT do this. I was overwhelmed by the amount of cheap and rude customers this deal brought in. I have been in business for many years and never encountered anything like this. They are coupon hoppers, 99 % do NOT return and no one can tell me it was because of bad service. I gave them the same great service that has kept me in business this long. Those who did return only did given another discount. Advice for anyone considering this. These companies promise all sorts of BS. Do your own deals and get half your normal price. Don’t settle for only a quarter and lose money while these vultures take your hard earned dollars. Give deals to your clients, their family, friends, co-workers, etc.. instead.
    This is especially bad for the service industry as these people do not tip well or at all, they are late and do not call. They will go online to complain about your business even though you are bending over backwards for them.
    Now you have to wait a YEAR to get the second half of the payment which is insane, what small business can afford to wait a year ? I think this hurts the economy, puts people out of business and these are not customers you want !

    • spaqueen
      December 18, 2013

      I agree I did the same and was taken advantage of by groupon. Groupon will make every excuse not to pay the merchant . Groupon is a scam and thr clients it attracts are opportunist who will take advantage of your business.

  2. Rob
    February 14, 2012

    As a small business owner you really need to work through your figures properly before committing to a deal. I’ve been doing deals with Groupon and other major coupon companies for almost a year and yes i do clean carpets. When i started i jumped in head first and it was difficult. I didnt expect repeat custom from most of the new customers even though we did an excellent job  – as mentioned above these are people that wouldnt usually pay full price for this service and to make matters worse, as they dont usually get their carpets cleaned regularly, a large number of the jobs were very difficult and time consuming (which further reduces our daily income). So why am i still doing coupons? The answer is simple. I took the coupon model and made it work. I offer a deal which when purchased gives the voucher holder an additional discount on any extra work they want done at the same time. I also offer them other products and services too – at very attractive rates. In short i’ve turned a loss leader into a profit maker as all the add-on services are profit – i dont pay the coupon company any commission on the extra business i drum up. It’s all about upselling and if you dont do it then you could lose thousands. Dont ask the customer if they want anything else after you have serviced them…. ask before you service them. This month i’m lauching my own spot remover on a national level in the UK. I’m also incorporating it into a local deal for the city i clean carpets in – something i would not have done without the coupon deals. It’s been a hard slog getting here but i think i have finally got it right and we are now getting referral work and requests for a follow up in 12 months which is great. We’ve tried Adwords and other forms of advertising and if you want to put a lot of customers in front of you, coupons is the quickest and probably cheapest way to do it. But it’s then up to you not the coupon company as to whether you capitalise on an oportunity or just provide a service. I say jump on the customer, show them you can do a great job, offer them a service they will remember, educate them in a practical way that will improve their lives (we provide some great advise) and give them a good reason to knock on your door next year and tell all their friends about how great you are (we send thank you emails with discounts for their friends to use). Sure it’s hard work but hey there is a recession out there and its better than no work which is what a lot of cleaning companies have – especially with the amount of competition out there.

  3. Lucy
    July 28, 2011

    Heidi do you know if Groupon has a built in mechanism for preventing consumers from purchasing multiple vouchers? And also, is the “cap” on number of vouchers sold set by the merchant or is that something that’s pre-set by Groupon?

    Also, how different is the experience for an online merchant selling a non-perishable product vs. a brick and mortar merchant selling a service or perishable product?

    Thanks for the article Heidi.

  4. Andrew
    July 25, 2011

    Small business owners should be extremely cautious before committing to groupon or living social. I met with a living social representative today, the figures she was able to provide for my industry (past merchants who used living social) were quite alluring. However, when you break down a per job cost (even with 80% profit margin) the numbers don’t add up. The model she used was a living social deal of $59 per job for carpet cleaning. Living social sent the owner of that particular carpet cleaning company a $31,000 check for 1,000 jobs. That equates to a gross income of $31 per job, when you subtract insurance, fuel costs, and chemicals, its a little less than $25 per job net profit. I’m not sure how anyone in my industry can afford such a ripoff!

    • Heidi Cohen
      July 25, 2011

      Andrew–Thank you for sharing your experience with my readers. Happy marketing,Heidi Cohen

  5. Affiliate products reviews.
    March 26, 2011

    This was very well authored and easy to understand. Unlike additional blogs I have read which are really not that good. I also found your posts very interesting. In fact after reading, I had to go show it to my friend and he enjoyed it as well!

  6. John
    February 8, 2011

    Groupon is terrible for business owners.

    After the deal (minimum of 50% off) and the cut that they take, you’re left with only 25% of the retail price of your merchandise. Subtract the cost of the merchandise, and you’re probably losing money.

  7. Sam – NY
    February 4, 2011

    A Groupon can potentially introduce a customer to something they did not know about and in that respect have a long tail. As with any loss-leader offer this is really hard to track. Also as you point out sometimes folks just won’t go for something at full price and for some items just moving the inventory is what is needed as would be the case for a clearance sale. I think sometimes it is helpful to try and think of these new tools in terms that are already familiar. Hey you don’t have coupons for everything or run a clearance every day (unless you are in the carpet business) so it is something you can add to your mix of tools selectively. I do think Groupons are here to stay.

    • Heidi Cohen
      February 5, 2011

      Sam–Thank you for the thoughtful comment. I agree that it’s useful to try a variety of marketing and promotional offers. The challenge with Groupon type offers is that it’s unprofitable (i.e.-looses money) for 1/3 of merchants. Further it attracts the type of customers that retailers don’t want and yields no incremental sales or long term value. For small businesses, this is a big risk. Happy marketing, Heidi Cohen

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