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Old 09-22-2010, 12:44 PM
 
Location: Pflugerville
12 posts, read 24,479 times
Reputation: 11

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One of the biggest debates on a business' decision to use Groupon is whether or not the customers that visit for the first time would ever come back as a regular customer without a coupon (assuming they had a good experience).

There's no doubt that Groupon can bring in a lot of new business quickly (sometimes too quickly), but most of these deals are considered to be a form of advertising for the business, as each coupon redeemed many times results in a loss for the company using it.

Would you go back to a business that uses Groupon to get you there in the first place, or would you hold off for the next "killer deal" before going back? I'm leaning toward the theory that using Groupon (or any other discount coupon), teaches customers to wait for the next big discount.
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Old 09-22-2010, 01:13 PM
 
2,238 posts, read 8,679,137 times
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I use Groupon and similar coupons all the time. It's an excuse to try something new. So far, I've returned at least once to probably 70% of them. The rest I wouldn't return to with a coupon. I do try to make an effort to return to places that have offered coupons since I do want places I like to stay in business...but I'm probably in the minority there.
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Old 09-22-2010, 01:26 PM
 
322 posts, read 812,369 times
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I generally only buy the groupon for things that I know I like, or places I've been before. For example, I would never buy one for S. Austin or Chinese food, because I live in RR and my husband doesn't care for Chinese. But if its a massage, or Mexican, or pizza.....I'll get them if it's in my budget.
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Old 09-22-2010, 01:51 PM
 
1,159 posts, read 2,521,251 times
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Yes, I've returned to several of them. I'm alway happy to discover a business that does a good job and has a good product so of course I'd return if they did well on both. I discovered Got Some Dim Sum, I found a great trainer on there, among others.
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Old 09-22-2010, 02:10 PM
 
Location: Pflugerville
12 posts, read 24,479 times
Reputation: 11
Glad to see that so far, my theory is not holding up. I know that businesses using Groupon are hoping for repeat business from the deal. It's good to hear that actual users would go back without necessarily waiting for the next discount first.
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Old 09-22-2010, 02:18 PM
 
Location: Cedar Park/NW Austin
1,306 posts, read 2,976,587 times
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I think it's like any other interaction with a business that I have. If I liked the service and/or food, then I'm more likely to return. If I didn't, I won't.

The Groupon aspect of it doesn't really factor in until you consider cost. If it's cheap to begin with (like Get Sum Dim Sum), then I'm more likely to return. However, if the Groupon itself basically paved the way towards my visit there (like a fancy salon visit at 50% off), then I'm less likely to return because the return visit has a much higher opportunity cost to it.

Then, you have to consider if the service is easily replaceable. I consider restaurants to be fairly unique experiences. A visit to Elevation Burger is not replaceable with a visit to Mighty Fine. Sure, they both serve burgers with a "natural" bent, but I consider Elevation Burger to taste better and to have more options that I desire. Whereas, I consider laser hair removal to be fairly interchangeable. Salon A is going to be trying to remove the same hair as Salon B and likely with the same types of tools. Thus, I'm more likely to wait on a second Groupon and throw out any sort of customer loyalty in order to save hundreds of dollars.
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Old 09-22-2010, 04:15 PM
 
Location: Avery Ranch, Austin, TX
8,977 posts, read 16,427,486 times
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Interesting that calel considers restaurants to be fairly unique; while I would tend to group them. For example, if I had a Groupon for Zoe's, I would try to convince DW to go PAST La Madeleine to use the coupon that day. Similar for barbecue or sandwiches/burgers. A coupon or Groupon would get me toward one vs another. Of course, it would not sway me BACK to a place I considered inferior.

The Groupon for Manny's Uptown got us to drive the 10 miles for lunch sooner than if we had not seen the coupon. We had been to the original; now, we know (and like) the new incarnation. We'll be back(but it could take a while as we use our Entertainment Coupons that expire in a few weeks .) Of course, Manny's was, I'm sure, hoping most folks would spend a fair bit more than the $20 Groupon covered. We didn't on that particular visit, but it was just the two of us.

On the other hand, I 'might' drive out of my way to get significant savings on a vehicle detail; however, our regular(and closer) car wash is fairly priced and service is good. In this case, the competition benefits the consumer.

As a former marketing person, I did wonder about the revenue split on Groupons. The number sold must be significant for the process to be worth the effort. For us, it would depend on the type of business as to its influence on future purchases. We're still new enough that Groupon, Entertainment Book and other such offerings can get us into a place at least once.
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Old 09-22-2010, 05:55 PM
 
Location: Pflugerville
12 posts, read 24,479 times
Reputation: 11
Quote:
Originally Posted by 10scoachrick View Post
As a former marketing person, I did wonder about the revenue split on Groupons.
Yes, that revenue split turns out to be 50% of the coupon value to Groupon (plus credit card processing fees). While Groupon seems to be a great value for the consumer, I just can't imagine it being a good value to the business. So if you get $40 worth of food for $20, the owner is seeing less than $10 of that purchase. Better have some dang good margins at that price.

If it truly would bring in repeat business, it might work for some, but I'm not so sure it really would bring in a lot of new, loyal customers in the long run. I'd like to think I'm wrong, but this is a very expensive way of advertising for a business.
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Old 09-22-2010, 06:01 PM
 
Location: Austin, TX!!!!
3,765 posts, read 8,680,940 times
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We've tried several restaurants using it and we'd go back to about half of the to pay full price. The others we wouldn't go back to even with a Groupon, because we didn't care for them.
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Old 09-22-2010, 06:19 PM
 
2,184 posts, read 6,154,604 times
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I typically buy Groupon for businesses that I always go to.
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