Groupons used to be the shnitz five years ago. They had a $6 Billion offer from Google. That’s B as in Billion. But they turned it down.Why? Well, it was rather complicated and a few years later to take the company public and issue an IPO. Now Groupon’s business model, some may say, has gone the way of the dodo bird… nada, extinct. But many businesses still use Groupon to put their goods and services out there. Is it truly good for business?
Well, the Groupons business model is basically you offer the “deal” and you get to keep half and Groupon keeps half. Wait… Groupon keeps half? Yes. For what you may ask. Well, primarily for their technology and ability to reach people that businesses simply don’t think they can. I hit up a friend who works for a carpet cleaning biz in Texas and he said that the owner “uses Groupon” to keep the business going in hard times. It helps him with cash flow and pays the employees and keep their families fed. Hard to argue with that. But he also said it’s a double edge sword. Once you get on the Groupon, it’s really hard to get off. People expect those “deals” to be there and often the Groupon junkies are the biggest complainers. Leaving bad reviews on review sites like Yelp and Google + isn’t good for one’s business reputation.
Another thing my friend pointed out was that Groupon doesn’t share the customer’s data with you. So you don’t get the emails and phone numbers to do any “re-marketing” to them. You can ask for it at the time of selling your goods or service, but most business owners are simply too busy to get this information then, or their employees don’t take the time to do it or just forget.
One thing is for sure, there are still plenty of deals for consumers to get on Groupon. There are millions of Groupon junkies out there with credit card in hand waiting to get their next deal. Just make sure if you are a business owner, you understand the pros and cons of getting on the Groupon band wagon. It can be a good thing for your business, or an addiction you won’t be able to kick.