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Groupon Continues Decline

by KingOfContentMarketing
5 replies
Groupon's core business continues to slide:

Look How Groupon's Core Daily Deal Business Has Declined - Business Insider

"A couple of years ago, everyone seemed at excited about Groupon. Every day, there was a new email in your inbox, offering discount sushi or low-cost yoga. What was not to like?

If you're one of those people who begun ignoring those emails over the last few months — or perhaps canceling your subscription altogether — then you're not alone. Groupon's so-called "third-party" revenue, which measures its daily deal business, has peaked and now appears to be in a decline."
#continues #decline #groupon
  • Profile picture of the author Aaron Doud
    Business Tip #302: If your business model is easily replicated you must find a way to dominate your market quickly and absolutely.

    Business Tip #762: Make your business profitable from or as close to day one as possible.

    Business Tip #106: Never give a one time customer a deal that makes you lose money.

    Groupon was never profitable and they never dominated their market because they never choose a market. They tried to do this nationally which made them lose money. But in each market they showed local Tv Stations, Radio Stations, Newspapers, and just normal people how the market worked. At which point they copied it before anyone could dominate the market.

    You know what happens now right? yeah you are stuck with in some cases dozens of daily deal sites in many markets. All are making small profits. None are dominating. And all will disappear once this model has ran it's course. Aka the moment small businesses realize that offering deals for under cost to one-time customers is a really bad idea.

    Daily Deal sites offer the customer 50% off and then keep half. This means in the real world the business is giving 75%. Most businesses have costs that are more than 25%.

    Why Daily Deals fail is one part math problem. 75% is a bad idea for most businesses And one part psychology problem. People who sign up for and buy "deals" on a regular basis are people who want to win. These are not people who are likely to later come back and pay retail. They simply are not built to pay retail.
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    Aaron Doud - Sales & Success
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  • Profile picture of the author Rearden
    Wish I would have shorted it.
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  • Profile picture of the author NewParadigm
    Groupon stock price has actually rallied hard since the end of last year. But they really blew their wad in spamming people with unwanted offers. They made a HUGE mistake by not blasting people with opportunities to more target select the types/categories of offers they want to see. Sending people irrelevant offers like sending single guys umpteen salon offers was disastrous. They have some category opt out page i think but they never told it to their customers. they got greedy and ignored the needs of their customers.

    I rarely look at the offers in my inbox anymore and have considered quitting altogether.

    I think we'll get daily deal 2.0 companies really honing in on targeting and prompting customers to narrow their offers to match their wants/needs much tighter. Maybe with a weekly or monthly wildcard offer to introduce a new category. If the big general daily deal players don't do this, the daily deal marketplace will splinter into niche markets. (i.e. a golf nut daily deal site on all things golf)

    I'm actually working on a business that is loosely based on daily deal but more certain tight knit groups of customers crafting their own deals with merchants. Taking the demand and the volume to the merchant to strike a deal.

    The good news for internet/offline marketers is that Groupon showed that businesses would pay up to 50% of gross sales for bringing them a sold customer!!!! It is freakin huge. Yet IMers are shy about asking customers for 97 bucks a month for this or that.
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    • Profile picture of the author umc
      Originally Posted by NewParadigm View Post

      The good news for internet/offline marketers is that Groupon showed that businesses would pay up to 50% of gross sales for bringing them a sold customer!!!! It is freakin huge. Yet IMers are shy about asking customers for 97 bucks a month for this or that.
      Not sure I ever thought about it like that, but that's an excellent point.
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  • Profile picture of the author mediamarket
    It seems to just be a hot fad for a few years.
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