Every time I sit down to try to share my thoughts on Groupon, I get so caught up in it, that I can’t send an effective message. So excuse the post for its broad generalizations and the lazy suggestion to google… but here goes, it just finally had to come out of my brain.
Here is what you should know about Groupon:
It is a deceitful company built on the broken backs of small business owners. Groupon does not express to small business that it is a short-term financing proposition. It suggests that they are helping to market the small businesses to new customers and a wider audience. What they do is create a discount so deep that there is no recovery. If you have a margin so large, that you can afford to offer Groupon deals, you do not need Groupon in the first place. Groupon will not suggest to limit the number of deals. They will simply ‘grope-on’ to a business’ cash flow without ever stepping foot into the establishment.
Some business owners are making horrible decisions to raise capital this way, and sure, that is their fault. Keep in mind that they are being misled by all the slick stuff on Groupon’s site and by the sales staff on the streets.
Here is what the businesses who have participated or are considering it should know:
This isn’t a way to raise money, but a way to spend money. Your target customer is never a coupon clipper. If you want to attract a wider audience, you should define it, assign a budget and market to them yourself and measure the results. Think: I want to attract folks within so many miles of ‘x’ who earn ‘y’ and have an interest in ‘z.’ I want to spend ‘a’ with expected results of ‘b.’ It isn’t that hard, and you don’t need a giant legalized mafia-esque company coming into your company to take funds that give you completely unwanted results and costs. Are you prepared to service on only deep discount customers? Can you hire and train additional staff to keep up with the needs created by this offer? Do you want this customer at all? Will they return and pay full price?
Here is what a person who buys a groupon should know:
Go back to the place that served you up at an extreme discount when you used the Groupon and support them at full price at least 10 times. Are they even still in business? Don’t demonize these companies, or help to demolish them. They are the backbone of your community, providing jobs, feeding the tax machine, and always working far more than 40 hours, to passionately bring you their best. If you try to use a groupon and are turned away, realize that they are just trying to get by. They have been deceived by Groupon in the first place and can’t necessarily handle the situation. Groupon isn’t there to help. They are somewhere else, conning the next business and counting your money.
The Take Away from this post: #Grouponkills small business
At the heart of this all, is that Groupon has done an extremely great job of blurring the lines between marketing and financing. Buyers all beware! I will try to find time to be more specific, then update and suggest other avenues for ‘marketing’ and ‘financing’ separately. I am not in the business of either of those things, but I can tell the difference! I just want folks to think hard about all of this. Please feel free to comment and post links to your experiences here.
Do your own research:
Google “Groupon is bad” or “Groupon kills” to find numerous stories on what has happened to some businesses that have participated. You may also find more specific definitions about how the offer has been made, how it ‘really’ works, and better examples of my broad statements above. If you know anyone thinking about buying, offering or using a Groupon, please help them do their research.