Would Groupon Help or Hurt Your Business?


Everyone loves a good deal. So it comes as no surprise that Groupon began as a small idea that quickly grew to encompass more than 150 North American markets with over 35 million users globally – and with rival companies quickly popping up to compete, like LivingSocial.com and Beget.

But are daily deal sites a good idea for your business?

The service has accrued a number of disappointments from business owners.

Merchants complain of having to offer steep discounts and paying Groupon a commission of more than 50%.

They’ve had to turn away full-paying customers to honor Groupon discounts.

Customers also become discouraged by paying full price and seeing how low you’re willing to set rates, which depreciates value.

However, the benefits include increased visibility and repeat customers.

Psychologically, people can’t resist a good deal.

We’re hardwired to purchase even if we don’t need a service or product – simply because it’s a good deal.

But even with the drawbacks, the benefit in using daily deal sites is getting people through the door.

Deal buyers will often make a purchase beyond the initial deal.

A June 2011 study by Rice University showed more than 77% of deal buyers spent more than the deal’s value. Another study reported 68% of daily deal buyers returning to the business that offered a deal – even without another discount.

It might be worth offering seasonal daily deals to increase your business visibility and attract new clientele that turn into repeat customers.