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70% of small businesses hate Groupon!

by Steve Solem
16 replies
Just read this tonight and while it may be a little biased since the study was conducted by iContact, there are some interesting items in here.

One in Four Small Businesses Hates Social Media; iContact Survey Uncovers Love... -- RALEIGH, N.C., Oct. 25, 2011 /PRNewswire/ --

Cheers,

Steve
#70% #businesses #groupon #hate #small
  • Profile picture of the author sprks79
    I believe the hate for Groupon, at least from my clients perspective, is that they charge way to much to make it a viable model. On top of that, Groupon doesn't help the advertiser to capture and capitalize on new customers, WE DO!! That is precisely why I started a local version of Groupon and it has been killing it in my local area, and I have expanded to a larger market close by. Small businesses prefer the smaller guy, they don't want to do business with the national company that doesn't care about the business, only the money. We, as local marketers fill that void.
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    • Profile picture of the author rnjonjo
      Originally Posted by sprks79 View Post

      I believe the hate for Groupon, at least from my clients perspective, is that they charge way to much to make it a viable model. On top of that, Groupon doesn't help the advertiser to capture and capitalize on new customers, WE DO!! That is precisely why I started a local version of Groupon and it has been killing it in my local area, and I have expanded to a larger market close by. Small businesses prefer the smaller guy, they don't want to do business with the national company that doesn't care about the business, only the money. We, as local marketers fill that void.
      sprks79,

      I'm assuming you have an email list to send your clients offers to. How do you go about building your list?
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      • Profile picture of the author J smith
        Speaking of Groupon anyone actually knows what they charge?

        I am working with one of their competitors atm, who offer a 50% off to their clients. Then they split the remaining 50% 50/50 with the merchant. The nice part is that you only pay for the clients you get, so it's actually a pretty good way to get new clients and build up a list.

        Is this how Groupon works as well? Or do they have a different model?
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    • Profile picture of the author Charles Harper
      Originally Posted by sprks79 View Post

      I believe the hate for Groupon, at least from my clients perspective, is that they charge way to much to make it a viable model. On top of that, Groupon doesn't help the advertiser to capture and capitalize on new customers, WE DO!! That is precisely why I started a local version of Groupon and it has been killing it in my local area, and I have expanded to a larger market close by. Small businesses prefer the smaller guy, they don't want to do business with the national company that doesn't care about the business, only the money. We, as local marketers fill that void.
      Let the church say Amen.

      If the business owner sees it as anything more than list building it will probably be a colossal failure. However, if they look at it as a way to generate future leads then they have the right perspective. That said, it does take an understanding of their margins and costs.

      They should know pretty much what it will mean to offer a certain product at a discount and what X number of new sales means. They should know what it takes to offer an upsell when the buyers comes in the door; or what it might take to bring that buyer back sooner than he or she would have come otherwise to spend at full price.

      They should know how much it costs them to acquire a new customer and what that customer is going to spend. No one is perfect and people do succeed without knowing those things. But if the business owners entered into a deal with Groupon WITHOUT knowing those thing they were flying blind. And it is no wonder that they hate them.

      Groupon sends a Goo Gob of traffic to a business, and even though they probably don't adequately explain what needs to be done to take advantage of that traffic; business owners can't claim total ignorance.

      This is yet another area for the offline consultant to set themselves apart and provide real value; showing the business owner what these things mean, how they should be priced...and how, when done effectively they can lead to more profit without expending great resources on advertising dollars.

      CT
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      • Profile picture of the author Detlev
        Originally Posted by Charles Harper View Post

        They should know how much it costs them to acquire a new customer and what that customer is going to spend. No one is perfect and people do succeed without knowing those things. But if the business owners entered into a deal with Groupon WITHOUT knowing those thing they were flying blind. And it is no wonder that they hate them.
        CT
        Well, I guess that is really the point. You have to know your numbers to play that game. But my impression is that business owners aren't always business people and often aren't so different from consumers...
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  • Profile picture of the author Aaron Doud
    Groupon is a waste of money for the advertisers. There are much better ways to do similar with less cost and overhead.
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    Aaron Doud - Sales & Success
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    • Profile picture of the author emotainment
      The whooshing sound is the sound of Groupon shares freefalling int he wind.
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      "You are what you think about all day long." ~ Ralph Waldo Emerson

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  • Profile picture of the author tamimabraham
    Wondering why? Are they lazy?
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  • Profile picture of the author AllThingsLuxury
    Anyone who has bought groupon shares is kicking themselves right now, and for good reason. Not a fan of them myself at all.
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  • Profile picture of the author JToneyUK
    I'd also like to know how much Groupon is for UK businesses.
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  • Profile picture of the author mjbmedia
    Groupon works fine, its the dumb business owners that dont work right , theyre too thick to think it all through and just plough ahead with little thought, its not Groupons fault that some of the business owners that use them are thick dumb and lazy retards.
    Of course these are the same business owners that then sell their sob stories of how they lost out on the deal, too thick and stupid to do basic due diligence, they deserve to lose the money.

    And of course we all know the press love to kick winners so of course Groupon will get it in the neck, every loss is their fault not the business owners, and theyll be little reporting on the Groupon success stories as that just doesnt make good news.
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  • Profile picture of the author purehatred
    sometimes groupon has lame deals..but yea it does damage small businesses and sometimes is useful for promotion too.
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  • Profile picture of the author Dmreed4311
    Groupon takes 50 percent. but here is the kicker, they make you pay the credit card fees so it is really like they get 50 percent and you get 47 percent. HERE IS ANOTHER THE KICKER!! if any get refunded in the first 60 days you get charged back for the whole amount even though you only got 47 percent.
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  • Profile picture of the author Tony Jones
    Lol damn, they have fees worse than fiverr! It was unstoppable a few months back though.
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  • Profile picture of the author Aaron Doud
    I wouldn't say it was unstoppable.

    It was an unprofitable business model for most everyone involved. They paid a huge amount to get each new customer. And in the end they went viral and made the mainstream news.

    But would you trust marketing advice from a company that can't themselves make money?

    Who i feel sorry for are the investors. The execs and founders at groupon have paid themselves huge bonuses without ever being profitable.
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