Should I or Shouldn’t I: Groupon

There have been a lot of examples of businesses (usually small businesses) that have used Groupon or LivingSocial, et al and have actually come out worse because of it on the financial side of things.  The upside, from what I’ve read, is that they’ve increased their exposure and some have even had return customers.

Both are good things.

I wonder, though, if the increased exposure and returning customers is more the exception and not the rule?

Increased exposure is probably the more reliable metric to bank on.  Though, there are probably many people out there that read what the deal is, don’t think it’s interesting, and move on.

Is that enough “exposure” to count?  What did that two seconds really earn the company?

Getting customers to return has to be considered the creme de la creme.   It has to be.  Why else would someone offer a loss-leader  if they weren’t at least fairly sure they were going to get something else out of that customer?

Why, when I think about selling something heavily discounted, do I think that the chances of gaining a real customer out of this transaction will have a success rate a little better than my chances of winning the lottery?

There has to be many examples out there of companies who have prospered because of Groupon, et al, but I have this feeling that it’s not what would be best for a small company trying to gain more customers who will come back later.

I think the value of a true fan is much greater than a passing fan.

So, should I or shouldn’t I?

Right now, I’m going to say, “Shouldn’t”.

Could things change?

Sure.

Thoughts?

 

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