Interesting overview of how Groupon is impacting businesses that use it

[Alibi Ike]

Here's a link from the wall street journal about the daily deal offerings: http://online.wsj.com/article_email/SB10001424052748704050204576218813288848414-lMyQjAxMTAxMDIwODEyNDgyWj.html.

Great comment by a marketing person:
Ugh, here we go again. Restaurants and retailers...STOP THE INSANITY! Coupons and % off deals breed a customer culture you don't want or need.Use your marketing budget wisely and work with seasoned industry pros to accentuate what makes you unique in your market, promote your signature items, build business and community alliances to unleash a wave of local brand ambassadors for your operation.Resources beyond discounting exist. Reach out and use your marketing dollars wisely!
Another comment on a DIY approach:
Here are a few ideas:

• - $20 gift card for expenditure of $100
• - Free entree next meal, for writing an online restaurant review
• - Free salon treatment for getting 3 friends to be customers
• - 4 for the price of 3 kayak tour (or day spa treatment)
• - Punchcard: Spend $500 in a month and get a $50 store credit

The latter rewards loyal customers, always a good thing. And a discount isn't always the best incentive -- giving a repeat customer a better table at a restaurant, a room upgrade at a hotel or an extra day of museum tix is a great way to express appreciation to a customer and doesn't cost anything.

 

[Tom]

When I said a class action suit was coming up, I was wrong. Already are on.
"It's unclear whether deal site offers are more coupon or gift card, says Gonzalo Mon, a partner at Kelley Drye & Warren, a Washington, D.C.-based law firm specializing in advertising law. And that leaves them in a legal netherworld. If you buy a $15 gift card, federal law requires that it can't expire for at least five years. But pay $15 for a $30 voucher, and at least part of that can disappear in as few as six months, according to deal sites' terms and conditions. The difference has led to three class-action lawsuits this year -- two against Groupon, in California and in Illinois, and another in Washington against LivingSocial -- that allege the companies' policies run afoul of federal and state gift card laws. The LivingSocial suit also alleges that the site does not adhere to Washington state law requiring cash refunds for cards valued at $5 or less. LivingSocial and Groupon say they ask merchants to honor the price paid for up to five years, in accordance with the law. All three suits are pending."
Read more: http://www.smartmoney.com/spending/deals/10-things-groupon-wont-tell-you-1300996599848/?cid=1122

 

[JBloggs]

Except this, which would be a no-no of course "Free entree next meal, for writing an online restaurant review"
Funny thing is someone saw an Inn in Shen Valley on living social (this guy works for planning and building dept for our county) and took the time to email to let us know this would be really good advertising for our business. Isn't that special.

 

[Generic]

I thought I was the only innkeeper who was talking zombies today (see my blog for more details) but here is another (vdideo):
NMA Portrays Groupon Users as a Horde of Zombies[/h1]http://eater.com/archives/2011/03/28/nma-portrays-groupon-users-as-a-horde-of-zombies.php#nma-groupon-1
.

I thought I was the only innkeeper who was talking zombies today (see my blog for more details) but here is another (vdideo):
NMA Portrays Groupon Users as a Horde of Zombies[/h1]http://eater.com/archives/2011/03/28/nma-portrays-groupon-users-as-a-horde-of-zombies.php#nma-groupon-1

That's exactly the point of Zombies in the original pop culture.... even brain dead they head to the mall to shop. A perfect anology.

 

[JBloggs]

This is another copycat of the same group deals:
http://www.rendevu.com

 

[Generic]

This is another copycat of the same group deals:
http://www.rendevu.com.

There are so many of them, now. Check out http://couprecoup.com and see how things are on the secondary market for these deals.

 

[egoodell]

I have heard a rumor that PAII's Jay is talking to Living Social for a deal. I'm not into that at all...it's just another discount and another complicated one to control at that.
RIki

 

[sandynn]

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.
I still am not going to do Groupon for the bed and breakfast.

 

[white pine]

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.
I still am not going to do Groupon for the bed and breakfast..

I did retail for 15 years and saw this trend happening. The big guys mark goods up so they could mark it on sale and still get full profit at 50% off. The little stores with nice stuff properly priced got hit because people expected that at 50-70% off too. I sold one teddy bear line eveyday at $10. Kohls sold the same bear at $20. on sale at $10, and people wanted mine at half off too. Didn't get it was the same price, wanted that 50% off.

 

[Copperhead]

I have heard a rumor that PAII's Jay is talking to Living Social for a deal. I'm not into that at all...it's just another discount and another complicated one to control at that.
RIki.

I have heard a rumor that PAII's Jay is talking to Living Social for a deal. I'm not into that at all...it's just another discount and another complicated one to control at that.
RIki

That was set in place a month or so ago... instead of a 60/40 split LS agreed to a 70/30 split for B&B's

 

[Alibi Ike]

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.
I still am not going to do Groupon for the bed and breakfast..

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.

Kohls must have an exhorbitant mark up. My SIL shops there and with her 30% off coupons, her Kohls cc (which gives her an extra discount), other perks she gets in the mail and the sales themsleves, they may as well pay her to shop there. If I want something from Kohls, I call her and she buys it and has it shipped to me (for free).

 

[Suzie Q]

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.
I still am not going to do Groupon for the bed and breakfast..

You are right people expect deal even myself I guess. I shop a Kolhs and If I don't get a 30% coupon I don't go. If I don't get one then my sister or my daughter or my niece gets one. So if no one gets one we just wait until next time. So I can see how this is affecting everyone.

Kohls must have an exhorbitant mark up. My SIL shops there and with her 30% off coupons, her Kohls cc (which gives her an extra discount), other perks she gets in the mail and the sales themsleves, they may as well pay her to shop there. If I want something from Kohls, I call her and she buys it and has it shipped to me (for free).
.

Oh my WORD! When I saw they wanted $90 for a swimsuit, I said...NEXT! (I may buy at the next shop, but NOT here!)

 

[JBloggs]

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30.

 

[Alibi Ike]

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30..

This is the one iloveinns has been talking about in their newsletters. The innkeeper's take was that they got very little business because they were out of the way and this has helped tremendously. But even that innkeeper said it's not or everyone. AND once they did so well in April, they negotiated their percentage of the take so they are now getting more than 25%.

 

[Generic]

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30..

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30.

I looked at http://livingsocial.com/deals/1550-54-off-shenandoah-valley-getaway and saw 683 at $239. Let's say they got the normal 50%, that's $119.50 per two night stay that includes breakfast, $10 off a the local farmer's market, wine tasting, a light picnic lunch, $60 off of dinner and $10 off at a dairy bar.
With 4 rooms (the cottages are more, so that's likely the difference between the 702, those who took the cottages for $349.) and two nights per stay that's 683 * 2 nights = 1366 nights / 4 rooms = 341.5 room night * $59.75 = $20404.63 per room per year in income to cover all their costs. Or $81618.50 for their 4 rooms. I hope they get big tips, they will need them, because I haven't included the cuts for any of the other businesses, including the restaurant.

 

[birdwatcher]

This is crazy but one of the jobs that called us for an interview was ADAMANT thatr groupon is the greatest thing since sliced cheese because most of the time its not used and its just revenue-on the other hand if we were to work on commissions our pay or revenue has already been sliced and if so many groupons have been sold would we get the cut right away or would he have to wait until its used to pay us. I think it was just dumb to make your revenue on something that most people won't use-eventually people will get the clue that its just stupid to buy something at a discount and not use it...
We didn't get that job, owner didnt want to disclose his revenue for previous year or should I say profit so that we could make a intelligent decision on his occupancy and not a discounted occupancy at that.
When we had the B & B we tried priceline in our slow months-even then we didn't get much of a bite.

 

[gillumhouse]

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30..

This is the one iloveinns has been talking about in their newsletters. The innkeeper's take was that they got very little business because they were out of the way and this has helped tremendously. But even that innkeeper said it's not or everyone. AND once they did so well in April, they negotiated their percentage of the take so they are now getting more than 25%.
.

I wonder if they are getting a promo fee for touting it everywhere. Are they leaving themselves any room for "real" reservations? Why would I ever go there at regular price?
I am certainly NOT in a "prime location" but after mentally "running the numbers" there is no way I could accommodate the numbers those "deal" generate nor could I survive on that revenue. I also do not want to bray to the world that this is the only way I can guests to my B & B.

 

[egoodell]

A 4 room inn (plus 3 cottages) sold 225 packages on living social, I just saw their tweet. Now how is that going to work. They'll be busier than a one-legged man at a butt-kicking contest and for what?
ahh interesting what I see on their website here as they sold 702 of some dinner package as well April 30..

This is the one iloveinns has been talking about in their newsletters. The innkeeper's take was that they got very little business because they were out of the way and this has helped tremendously. But even that innkeeper said it's not or everyone. AND once they did so well in April, they negotiated their percentage of the take so they are now getting more than 25%.
.

This is the one iloveinns has been talking about in their newsletters. The innkeeper's take was that they got very little business because they were out of the way and this has helped tremendously. But even that innkeeper said it's not or everyone. AND once they did so well in April, they negotiated their percentage of the take so they are now getting more than 25%.

This is it exactly . The B&B that did and repeated a groupon here is enough out of the way (20 minutes south of Charlottesville on a windy country road - no restaurants - etc. It worked great for her but none of us in town would do it. Between B&B and wine tours we only have 3 days off here in May
RIki

 

[Alibi Ike]

Another opinion on group deals:
http://techcrunch.com/2011/06/11/google-offers-daily-deals-business-die/

 

[toddburme]

Google Offers is only in a few cities. This must be a harder business model then it looks. With all of their money, they could have rolled out nationwide.