How does Groupon get paid?

[Morticia]

Just listened to a news story and it implied that Groupon gets half of whatever the person pays for the coupon.
So, you do a coupon that the person pays $50 for and Groupon gets $25. I can't find anything on the site that explains it.
Also, what does it mean that a Groupon has 'tipped'?

 

[cherry64]

I have quite recently gotten addicted to groupon. Most of your questions might be able to be answered here. http://www.grouponworks.com/
A groupon has tipped when the minimum number of buyers has decided to go with the deal. If the minimum number of buyers is not met, the deal doesn't go through.

 

[toddburme]

I would think these would work great for a large hotel in the off season. Anywhere that also has food or other services that they would make bank on to offset the huge discount.

 

[greyswan]

we did a package deal on Groupon recently... counting it as advertising because of the 50/50 split. Glad we did it - we'll have to see if we'll do it again. We sold 80 groupons and only have 8 booked so far. We got exposure to over 125,000 people doing it for the Hampton Roads and Richmond markets.

 

[Morticia]

we did a package deal on Groupon recently... counting it as advertising because of the 50/50 split. Glad we did it - we'll have to see if we'll do it again. We sold 80 groupons and only have 8 booked so far. We got exposure to over 125,000 people doing it for the Hampton Roads and Richmond markets..

OK, can you explain how it works? It looks to me like whatever you list the 'item' at, Groupon gets 50%, is that right? I'm thinking 80 groupons showing up at half off would be crazy. 8, not so bad.

 

[greyswan]

The deal gets posted, the groupon is purchased thru groupon with credit card. groupon gets half. The sales person we worked with was super nice and helpful. We were given other lodging deals as examples - I even called 3 of the 4 to get their take on it. One said they probably wouldn't do it again, the other two said it was a great advertising tool for them and would do it again.
Each groupon deal is customized...Our deal requires reservations, limited to two person to a room, does not include taxes, has a one yr expiration date and was for just one night stay. Hoping to turning the one night stay into a two night stay when the reservations are made to help offset the discounted night. We also had made it into a package deal, too, thinking that would help offset the price and give us a chance to practice our add-on services. We're not going to make any money on the deal, but hoping that the exposure will get us reservations later. So far the reservations made, 2 of the 8 turned into a 2 night stay and the people we've talked to are delighted to be coming to stay with us. One is just completing chemo and is celebrating, others are celebrating birthdays and anniversaries.
It's definitely not for everyone - I took a chance with it. We'll see how it plays out!

 

[toddburme]

Didn't you get paid on the 80 though? So if someone buys and doesn't use it, you get to keep the $$$ right. I was figuring if you sold 80 at 50% off and then groupon takes 50% of that, you are selling rooms at 25% of face value. if you did one right now and winter was your slow season... Then add in that it is advertising.
We are too small to do it and we don't have hardly any add on services so I think it would not make sense for us. But it is an intriguing idea.

 

[greyswan]

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

 

[JBloggs]

Question for those using groupon:
Instead of hoping the guest will stay an addtl night at full fare, had you considered a two night stay with add ons, so it is a BOGO?
Any advice if this would sell better, or work better for you? A couple more months have passed, so any updated innsights from you?
Anyone new trying groupon?
I am looking at it right now, so this is why I ask. THANKS FOR THE INNFO.

 

[Copperhead]

Question for those using groupon:
Instead of hoping the guest will stay an addtl night at full fare, had you considered a two night stay with add ons, so it is a BOGO?
Any advice if this would sell better, or work better for you? A couple more months have passed, so any updated innsights from you?
Anyone new trying groupon?
I am looking at it right now, so this is why I ask. THANKS FOR THE INNFO..

I have not done Groupon but have done something similar in a more regional market. Ours were valued at $100 but were sold for $50 and good on a 2 or more night stay. Sixty were sold, I have under 30 redeemed and they expire on the 31st. One person called just the other day and booked for the end of the month (29-30, not good for holidays

) said they had forgotten all about it. Another called and asked about extending the use for a date in Feb. I told them that if they would send in the coupon and prepay their complete stay prior to the end of the year, with no cancellation or refund I would do it. Why? 1 - I still will be paid as if they were staying now, 2 - this is for their honeymoon and may become a regular guest, 3 - since it is a honeymoon & it is prepaid, I may convince them in some of my add-ons as time nears.
Now getting back to the 30+- that came.... according to my records, over 1/2 chose my least expensive room and of those only 1 purchased an add on. Of the other 1/2 only 5 chose my most expensive room but all of those purchased add ons of some kind. None stayed any longer than 2 nights and all but 2 were weekends.
Hope this helps.

 

[toddburme]

We signed up to do it and never heard back. My idea was to fill in the winter months with customers even if the payback was pretty slim.

 

[egoodell]

We signed up to do it and never heard back. My idea was to fill in the winter months with customers even if the payback was pretty slim..

We signed up to do it and never heard back. My idea was to fill in the winter months with customers even if the payback was pretty slim.

Try calling them. A B&B here that is in a location that's south of Charlottesville did it and was very pleased with the results. She says the customer service was very attentive. If you 're in a not-the-best location it could really work. She says they added nights to the one night groupon deal.
RIki

 

[egoodell]

Question for those using groupon:
Instead of hoping the guest will stay an addtl night at full fare, had you considered a two night stay with add ons, so it is a BOGO?
Any advice if this would sell better, or work better for you? A couple more months have passed, so any updated innsights from you?
Anyone new trying groupon?
I am looking at it right now, so this is why I ask. THANKS FOR THE INNFO..

Question for those using groupon:
Instead of hoping the guest will stay an addtl night at full fare, had you considered a two night stay with add ons, so it is a BOGO?
Any advice if this would sell better, or work better for you? A couple more months have passed, so any updated innsights from you?Anyone new trying groupon?I am looking at it right now, so this is why I ask. THANKS FOR THE INNFO.

We have an inn here in Scottsville which is about 20 minutes south of Charlottesville. A very nice inn. They had a very positive experience with groupon. She says that many added a night. It's the inn in Scottsville with the vineyard.
RIki

 

[greyswan]

we emailed groupon and were contacted by their sales force... we are out of the immediate areas but in driving distance to a couple of areas served by groupon so we set up deals in both areas. I like the idea of 2 night deal with add-ons - we may do that next year. of the 90 rooms we sold, only have redeemed 20 of them so far with about 4 on the books for next year. The guests we have had so far have been wonderful.... only 2 had ever been to a B&B before.

 

[toddburme]

we emailed groupon and were contacted by their sales force... we are out of the immediate areas but in driving distance to a couple of areas served by groupon so we set up deals in both areas. I like the idea of 2 night deal with add-ons - we may do that next year. of the 90 rooms we sold, only have redeemed 20 of them so far with about 4 on the books for next year. The guests we have had so far have been wonderful.... only 2 had ever been to a B&B before..

we emailed groupon and were contacted by their sales force... we are out of the immediate areas but in driving distance to a couple of areas served by groupon so we set up deals in both areas. I like the idea of 2 night deal with add-ons - we may do that next year. of the 90 rooms we sold, only have redeemed 20 of them so far with about 4 on the books for next year. The guests we have had so far have been wonderful.... only 2 had ever been to a B&B before.

This seems to be typical. The people do not redeem so that you make up the big discount and cost on open gift certificates.

 

[cherry64]

I have quite recently gotten addicted to groupon. Most of your questions might be able to be answered here. http://www.grouponworks.com/
A groupon has tipped when the minimum number of buyers has decided to go with the deal. If the minimum number of buyers is not met, the deal doesn't go through..

Local Bed and Breakfast Groupon. 1/6/11
I have noticed a trend in deals being offered for more than one day. Usually the Friday deal is offered all weekend, but other offers during the week are having 2 or 3 days to buy the deal.

 

[egoodell]

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right..

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki

 

[cherry64]

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right..

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki
.

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki

I was taking to a local business that offered groupons and they were told to anticipate 80% of the groupons to be redeemed. The other 20% are either gifts that people choose not to use or they expire. The business can decide how lond they are good for. I see anywhere from 6 months to a year from purchase as the normal expiration dates.

 

[egoodell]

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right..

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki
.

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki

I was taking to a local business that offered groupons and they were told to anticipate 80% of the groupons to be redeemed. The other 20% are either gifts that people choose not to use or they expire. The business can decide how lond they are good for. I see anywhere from 6 months to a year from purchase as the normal expiration dates.
.

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki

So my state does not allow gift certificates to expire but I guess these are "coupon" not "gift certificate" so they are allowed to expire?
RIki
I was taking to a local business that offered groupons and they were told to anticipate 80% of the groupons to be redeemed. The other 20% are either gifts that people choose not to use or they expire. The business can decide how lond they are good for. I see anywhere from 6 months to a year from purchase as the normal expiration dates.

 

[bbinnsitters]

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right..

yes, we'll get paid for the 80...over 3 months. Exactly... if someone doesn't use it, we get to keep the $. 1/4 of the the face value is exactly right.

Are you saying that people buy but don't use the Groupons? In this day with the economy as it is? Are the coupons good for only a specific amount of time? Otherwise how do you know you're keeping the money - they can't show up a year down the road and want to use it?
RIki
.

I have bought two groupon deals so far...haven't used either of them yet but plan to! (I don't forget stuff like that for some reason!) I am looking at doing another groupon for a Select Registry place down in South Bend, IN - They are advertising it as 50% off - I will buy a certificate for $80 and be able to stay there for one night. I'll keep you all posted after I use any of them as there hasn't been much feedback so far on the using end - only participating.