Interesting overview of how Groupon is impacting businesses that use it

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egoodell

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This is why I couldn't really understand why business owners were excited about this service. I am glad it is not in my area yet..
I have had Groupon call me and before they say anything I tell them I'm not interested. We are so booked right now we have to block off days to work on the addition. I looked at Groupon and there is no listings for my entire town, and I'm not suprised.
RIki
 

Copperhead

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Here's a really good article about Groupon. Jay Karen shared this on his FB page and also did a comment Why Groupon Is Poised For Collapse.
Breakfast Diva said:
Here's a really good article about Groupon. Jay Karen shared this on his FB page and also did a comment Why Groupon Is Poised For Collapse
Sounds to me like Jay feels this currently is a good thing for B&B's. Below is his comment about the article (posted below the article) . He also posted a FB & tweeted about giving a speach to LS sales group in UT "Interest in the B&B experience is spiking"
Jay Karen wrote: "The author writes, "Groupon can clearly deliver customers. But in order to know if it makes financial sense as a customer acquisition tool, merchants need to know two key numbers:
1. The proportion of Groupon customers who are already their customers.
2. How often new customers come back."
What we are finding in the B&B industry is that an enormous lion share of people buying Groupon and LivingSocial packages have never stayed at a B&B before, let alone the one participating in the deal. It's too early to tell what the repeat business will be like, but many innkeepers are able to strike deals that are filling rooms that would otherwise have been empty. They're creating packages that lift their net income. It's all bringing a new generation of guests through our doors who would not have even thought about staying at a B&B if it weren't for these programs.
I think the higher the empathy level being displayed by the social buying company for the merchant to create a favorable and sustainable deal, the more likely they will themselves be sustainable. We are finding that LivingSocial terms for B&Bs have been better than Groupon (generally speaking).
Any investment in marketing - no matter how bold - is a risk. The net effect seems to be positive for our industry so far. As long as it's a partnership and not co-dependency, it could be sustainable."
 

toddburme

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I think it is a fad. People are not going to continue to buy something they don't use. And a large percentage of this stuff is not used. So for now if it helps then great, why not. I just doubt that we will be this obsessed with them in 5 years.
Having said that, I buy about one deal a month at least and belong to 3 of them and get ads for 2 cities.
Another side note, in Brazil a B&B friend of mine said they only charge 25% so maybe we are seeing price pressure that will help these make more sense.
 

Alibi Ike

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And the other side of the coin... http://techcrunch.com/2011/06/18/ribman-groupon-bashing/
 

Silverspoon

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Actually, I kinda like Groupon...they bring me business. Here's how it works. Folks go to the web site for the nearby inn that uses Groupon, then they go to the reviews and see that THAT inn is #3 in the town and the reviews are only so so. Hmmm, they think, wonder what #1 ranked inn is like. So, BINGO, they take a look at our web site and, seeing as it is a special occasion, they decide to ditch the Groupon idea and book a few days in a more luxurious, B+B, willing to pay the price for the extra amenities and the wonderful breakfast.
Would I ever sign up for Groupon..no way. But it can be used to our advantage.
 

Madeleine

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Actually, I kinda like Groupon...they bring me business. Here's how it works. Folks go to the web site for the nearby inn that uses Groupon, then they go to the reviews and see that THAT inn is #3 in the town and the reviews are only so so. Hmmm, they think, wonder what #1 ranked inn is like. So, BINGO, they take a look at our web site and, seeing as it is a special occasion, they decide to ditch the Groupon idea and book a few days in a more luxurious, B+B, willing to pay the price for the extra amenities and the wonderful breakfast.
Would I ever sign up for Groupon..no way. But it can be used to our advantage..
Using Groupn to our advantage...guests here over the weekend had one to a local business but they needed to stay overnight so they could get there at 8 AM. Bingo!
 

Copperhead

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Eric Arthur Blair said:
After reading that article, that business was set for demise even without the Groupon. As with any contract, you need to read ALL the details. They tell the business BEFORE the deal has run to be ready for alot of business from the very first day. We had a market owner stay with us that sold over 12,000 vouchers for a special sausage in his butcher shop. He said that they warned him to be prepared, he was astounded by the numbers and quickly added stock. He also said that 9/10 of the people bought other items while in the store and many have become loyal customers since. For him it worked very well.
It works better for some businesses than others and it must be thought out very carefully before jumping in. It has to be looked at as a very costly marketing campaign and hope to make money from other things.
 

Generic

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Eric Arthur Blair said:
After reading that article, that business was set for demise even without the Groupon. As with any contract, you need to read ALL the details. They tell the business BEFORE the deal has run to be ready for alot of business from the very first day. We had a market owner stay with us that sold over 12,000 vouchers for a special sausage in his butcher shop. He said that they warned him to be prepared, he was astounded by the numbers and quickly added stock. He also said that 9/10 of the people bought other items while in the store and many have become loyal customers since. For him it worked very well.
It works better for some businesses than others and it must be thought out very carefully before jumping in. It has to be looked at as a very costly marketing campaign and hope to make money from other things.
.
We have bought a few and we have noticed that the success is all up to the proprietor and the deal that is presented.
We have been to a few who had artificially high prices so that they could offer a deal. The problem is, the prices are so high that you never want to come back.... and we haven't.
We have been to a few that the problem was the business and instead of fixing it before the deal, think that the deal will bring in new clients. You need to fix the problem before you invite people in to see, otherwise they don't come back. We can see these deals before they come, the businesses list themselves all over the place. We never buy these deals.
A few deals are structured in a way we aren't interested. Groups of four, beer included, only after 10PM, etc. Not interested.
Then there are the few good deals. Deals so good, we have gone back or thrown business their way. Businesses that realize that this is a way to introduce someone to their product and get it moving. The number 3 on TA in the restaurants around here... started that way. Did the deal twice. We bought both times, brought other innkeepers with us, etc. His prices were always fair and the deal was great and he did each and every deal with a smile and treated everyone great. Those are the people that benefit from the deal sites.
 

Joey Camb

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Eric Arthur Blair said:
After reading that article, that business was set for demise even without the Groupon. As with any contract, you need to read ALL the details. They tell the business BEFORE the deal has run to be ready for alot of business from the very first day. We had a market owner stay with us that sold over 12,000 vouchers for a special sausage in his butcher shop. He said that they warned him to be prepared, he was astounded by the numbers and quickly added stock. He also said that 9/10 of the people bought other items while in the store and many have become loyal customers since. For him it worked very well.
It works better for some businesses than others and it must be thought out very carefully before jumping in. It has to be looked at as a very costly marketing campaign and hope to make money from other things.
.
I think people are also quick to blam groupon when there is a problem - with offers like this groupon does warn you ie only allow so many to be purchased so that you don't get over loaded! the lady with the cupcakes I am sure I have mentioned earlier went against their advice and didn't limit it - ie 20 cup cakes basically at cost - got about 20,000 orders! but she freely admitted groupon warned her ie limit it to 100 and then you could do another offer if you sell out, didn't listen and it all went pear shaped!.
I think depending on what ever else you have to sell it can be useful but feel for myself as we only sell bed and breakfast there isn't really much to upsell. ie local hotel does it in February when its not busy but they have 2 restaurants, bar, parking, wi-fi, room service and upgrades to sell and staff whos saleries have to be paid no matter what - therefore it is worth having someone in at cost in case they buy something else. For me I can have the day off! ha ha
 

MarcZ

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I am a proponent of Groupon, and have used it to purchase everything from art supplies to brake jobs. Groupon is a great way to bring in new customers that perhaps are either brand loyal to another company (inn) or are just plain looking for a great deal on a new experience. When using groupon; treat your guests just as if they were paying full price, remember this is marketing. I have recently moved to a new area, and found a great groupon for a break job on my vehicle; when I went to redeem the groupon deal, I was treated like a second rate customer, and given exceptionally poor customer service. This was a textbook "fail"; had they treated me like I paid full price, they may have had my business for years to come, instead they now have a disgruntled customer who will surely share my experience both online and offline about the poor experience. If your business will not be happy in what the groupon deal brings to you as a business, then do not use it. Make sure you are comfortable with the deal you offer.
 

Joey Camb

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I just benefited from Groupon! couple that just checked in said they had got a really good deal on a local restaurant on groupon and decided to make a night of it! ha ha
 

Madeleine

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I am a proponent of Groupon, and have used it to purchase everything from art supplies to brake jobs. Groupon is a great way to bring in new customers that perhaps are either brand loyal to another company (inn) or are just plain looking for a great deal on a new experience. When using groupon; treat your guests just as if they were paying full price, remember this is marketing. I have recently moved to a new area, and found a great groupon for a break job on my vehicle; when I went to redeem the groupon deal, I was treated like a second rate customer, and given exceptionally poor customer service. This was a textbook "fail"; had they treated me like I paid full price, they may have had my business for years to come, instead they now have a disgruntled customer who will surely share my experience both online and offline about the poor experience. If your business will not be happy in what the groupon deal brings to you as a business, then do not use it. Make sure you are comfortable with the deal you offer..
What I have found with numerous calls from Groupon and Social Living is that they want a HUGE investment from the inn. 125 packages at minimum. They kept telling me to add stuff in to bring up the price but all of the add ins are cash out of my pocket to add them in.
Yes, only do it if you can afford it.
A deal could net me $4600 for 125 stays. Or, I could try to convince 30 people to stay for full price. Or, I could just have a few more vacation days.
 

Copperhead

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Marc: "... found a great groupon for a break job on my vehicle; when I went to redeem the groupon deal, I was treated like a second rate customer, and given exceptionally poor customer service. This was a textbook "fail"; had they treated me like I paid full price, they may have had my business for years to come, instead they now have a disgruntled customer who will surely share my experience both online and offline about the poor experience. If your business will not be happy in what the groupon deal brings to you as a business, then do not use it. Make sure you are comfortable with the deal you offer."
This is true about any special or deal, it is your opp to gain a new customer, you must use the marketing to put your best foot forward, or you have lost high cost of the marketing campaign AND future business from this customer AND those he shares the experience.
 

MarcZ

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@madeleine Wow, that math is staggering. I would probably opt for more vacation days myself. Thank you for the information, it's great to know what group on "expects".
It does seem however that Silverspoon, as well as Camberly Hotel have found a great opportunities to use Groupon without having to ...actually use Groupon. Great customer reviews and reputation do go a long way. Interesting topic, thanks for the insight.
 

Madeleine

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I am a proponent of Groupon, and have used it to purchase everything from art supplies to brake jobs. Groupon is a great way to bring in new customers that perhaps are either brand loyal to another company (inn) or are just plain looking for a great deal on a new experience. When using groupon; treat your guests just as if they were paying full price, remember this is marketing. I have recently moved to a new area, and found a great groupon for a break job on my vehicle; when I went to redeem the groupon deal, I was treated like a second rate customer, and given exceptionally poor customer service. This was a textbook "fail"; had they treated me like I paid full price, they may have had my business for years to come, instead they now have a disgruntled customer who will surely share my experience both online and offline about the poor experience. If your business will not be happy in what the groupon deal brings to you as a business, then do not use it. Make sure you are comfortable with the deal you offer..
But you notice that Silverspoon isn't offering a Groupon herself, she's coattailing off someone else who is in over their head and can't meet the demand. That's a good use of Groupon.
 

Breakfast Diva

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@madeleine Wow, that math is staggering. I would probably opt for more vacation days myself. Thank you for the information, it's great to know what group on "expects".
It does seem however that Silverspoon, as well as Camberly Hotel have found a great opportunities to use Groupon without having to ...actually use Groupon. Great customer reviews and reputation do go a long way. Interesting topic, thanks for the insight..
MarcZ said:
@madeleine Wow, that math is staggering. I would probably opt for more vacation days myself. Thank you for the information, it's great to know what group on "expects".
It does seem however that Silverspoon, as well as Camberly Hotel have found a great opportunities to use Groupon without having to ...actually use Groupon. Great customer reviews and reputation do go a long way. Interesting topic, thanks for the insight.
Here's what Groupon/Living Social expect. They expect you to discount your rooms 50%. THEN they take a 30%-40% cut off that discounted rate. The least inventory I've ever seen b&bs have for their deal is 100 room nights (that doesn't mean they will sell all of them) and I have seen some in the 200s.
If you can afford to sell your rooms at 80%-85% off rack rate, more power to you. That's why it makes better sense for hotels to do this than b&bs. At that big of a discount, I doubt you can afford to hire any housekeeping staff and if you have to do it yourself you'll be mighty tired for not a lot of income. Nevertheless, it has worked for some.
 

ild2014

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According to the BBC news, Group buying has became a multi-billion-dollar business throughout the world spreading rapidly from Europe, USA to Australia, China, India and all other countries. The major name in Group Deal website is Groupon that was launched in November 2008. You believe or not, according to the marketing watch, Groupon have earned revenue of 2.57-billion in year of 2013. Groupon has been purchasing its' competitors so that no one would come up in the field. Anyway, I love their strategies to be No. 1. They also have their own affiliate programs for the aggregator group deal websites. You can also build your own aggregator group deal websites very easily if you would have a professional website. iLead Digital can assist you in group buying website development and in linking many big group deal websites to show their products and earn commissions.
 

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