Reaffirmation of Why I Will Never Use Grope-on

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Groupon is not for everyone for sure. We have been effectively using Groupon and Living Social for several years and in every single case we have made a profit. I would guess over the years we have had over 2000 customers come through our doors using these promotions. We only have 2 negative reviews from folks using these promotions.
We have found that most customers come once to use the promotion and never really return. That's fine because we will not do a promotion if the cost structure is such that we are not making at least a few dollars on every room, after the cost of labor. This does 2 things for us: During slower months it offsets some overhead. It also helps keep our housekeepers employed which lessens the chances they will find other jobs in the winter and not return. During the busier months we limit the usable days to our slowest days of the week, helping push our occupancy close to 100%. The incremental cost of the last few rooms is very small and the demand from that time of year is much higher so the profit margin goes up substantially.
We have obtained a number of regular and repeat guests. Now they do come back using new promotions sometimes (but they are more likely to upgrade to a larger and more expensive room), but they also book directly with us.
We have also found that about 20 to 25% of the vouchers are never used. We still get paid for these so the effective profit goes up.
We tend to get far more positive reviews from guests using these promotions than negative ones.
I understand it is a bitter pill to swallow, giving up so much perceived value, but the true value of an un-rented room is $0 and it can never be recovered. It's tough giving a large percentage to Groupon for the promotion, but ask yourself what it would cost to get the marketing that you will get from them? They are sending your promotion to hundreds of thousands of potential customers or more, who want to see what you have to offer. They get a lot of traffic to their website. It drives a lot of traffic to your website and it does drive a lot of sales. I know for us to penetrate the NYC market would be cost prohibitive beyond belief, but we can do it with this kind of promotion.
We have seen for the most part nothing but benefit over the years. Honestly we have more problems with customers booking through Booking.com or Expedia than we do with the flash sale promotions.
Having said all this we have been seeing a steady decline in the amount of business these promotions generate. We also provide different options, some may show as much as a 50% discount (with added in package items) while some options are less of a discount. We have never paid a 50% commission to Groupon and would suggest anyone wanting to try using them negotiate the commission down. I have had to walk away from deals and just tell them no to certain aspects. They will always push for more and you need to push back. Ultimately they can't exist without our products so many times they will come around with something more reasonable..
When they first contacted us it was to be included in the small city nearby. So, the first issue was we aren't in the city, there was no public transport at the time so you needed a car. They wanted us to discount the room 50%, not give them a 50% commission. They took 50% of the price the room was listed at, sending us 50%. But, it's essentially 25% of what the room was listed at on our website.
I'm not sure how my state handles vouchers, but at the time these offers were very popular, unredeemed purchased GC's had to be remitted to the state so there was no profit margin there.
We don't have staff so being empty isn't as big a deal. We just take the day off.
Part of the issue I had with the process is it tells the guest that you're making money at half off, even tho they had no idea we were only getting half of that. So, where's the value in paying full price? If we can succeed on half off, then we're gouging at full price.
It's good to hear a positive story, there were so many stories of very unhappy guests who couldn't get into the place they bought the voucher for, or the accommodations and the add ons were not as described. (And there were stories from innkeepers who were overwhelmed by the process and admitted they couldn't keep up with demand.)
.
Morticia,
When they first contacted us years ago they asked for the same thing as you described. We told them no because we would not be making enough profit to be worthwhile. We insisted (and still insist) that we package items of low cost and high value and we many times offer less than a 50% discount. You definitely have to be careful or you can lose money.
In our case our prices are more or less based on the demand the particular time of year. In the winter months we may sell rooms for $100 and in the Summer we may sell the same room for $300. Our customers are not booking because of how much they think we are making, otherwise they would demand the $100 rate in the Summer. We strategically run the promotions around weak demand periods and in doing so bring our actual sale price in line with what equivalent lodging establishments in the area are typically selling rooms for. The customers get a perception of a great deal so it generally turns out to be a win for all of us.
This is not to say we don't have issues from time to time. One time we allowed the actual sell price to get too low. We were still making a profit, but it caused us to get some customers we really did not want to have. We learned a lesson and have always made sure the sell price is high enough to attract better customers. If we have to we add higher value extra's to boost the price up.
 
Groupon is not for everyone for sure. We have been effectively using Groupon and Living Social for several years and in every single case we have made a profit. I would guess over the years we have had over 2000 customers come through our doors using these promotions. We only have 2 negative reviews from folks using these promotions.
We have found that most customers come once to use the promotion and never really return. That's fine because we will not do a promotion if the cost structure is such that we are not making at least a few dollars on every room, after the cost of labor. This does 2 things for us: During slower months it offsets some overhead. It also helps keep our housekeepers employed which lessens the chances they will find other jobs in the winter and not return. During the busier months we limit the usable days to our slowest days of the week, helping push our occupancy close to 100%. The incremental cost of the last few rooms is very small and the demand from that time of year is much higher so the profit margin goes up substantially.
We have obtained a number of regular and repeat guests. Now they do come back using new promotions sometimes (but they are more likely to upgrade to a larger and more expensive room), but they also book directly with us.
We have also found that about 20 to 25% of the vouchers are never used. We still get paid for these so the effective profit goes up.
We tend to get far more positive reviews from guests using these promotions than negative ones.
I understand it is a bitter pill to swallow, giving up so much perceived value, but the true value of an un-rented room is $0 and it can never be recovered. It's tough giving a large percentage to Groupon for the promotion, but ask yourself what it would cost to get the marketing that you will get from them? They are sending your promotion to hundreds of thousands of potential customers or more, who want to see what you have to offer. They get a lot of traffic to their website. It drives a lot of traffic to your website and it does drive a lot of sales. I know for us to penetrate the NYC market would be cost prohibitive beyond belief, but we can do it with this kind of promotion.
We have seen for the most part nothing but benefit over the years. Honestly we have more problems with customers booking through Booking.com or Expedia than we do with the flash sale promotions.
Having said all this we have been seeing a steady decline in the amount of business these promotions generate. We also provide different options, some may show as much as a 50% discount (with added in package items) while some options are less of a discount. We have never paid a 50% commission to Groupon and would suggest anyone wanting to try using them negotiate the commission down. I have had to walk away from deals and just tell them no to certain aspects. They will always push for more and you need to push back. Ultimately they can't exist without our products so many times they will come around with something more reasonable..
When they first contacted us it was to be included in the small city nearby. So, the first issue was we aren't in the city, there was no public transport at the time so you needed a car. They wanted us to discount the room 50%, not give them a 50% commission. They took 50% of the price the room was listed at, sending us 50%. But, it's essentially 25% of what the room was listed at on our website.
I'm not sure how my state handles vouchers, but at the time these offers were very popular, unredeemed purchased GC's had to be remitted to the state so there was no profit margin there.
We don't have staff so being empty isn't as big a deal. We just take the day off.
Part of the issue I had with the process is it tells the guest that you're making money at half off, even tho they had no idea we were only getting half of that. So, where's the value in paying full price? If we can succeed on half off, then we're gouging at full price.
It's good to hear a positive story, there were so many stories of very unhappy guests who couldn't get into the place they bought the voucher for, or the accommodations and the add ons were not as described. (And there were stories from innkeepers who were overwhelmed by the process and admitted they couldn't keep up with demand.)
.
Morticia,
When they first contacted us years ago they asked for the same thing as you described. We told them no because we would not be making enough profit to be worthwhile. We insisted (and still insist) that we package items of low cost and high value and we many times offer less than a 50% discount. You definitely have to be careful or you can lose money.
In our case our prices are more or less based on the demand the particular time of year. In the winter months we may sell rooms for $100 and in the Summer we may sell the same room for $300. Our customers are not booking because of how much they think we are making, otherwise they would demand the $100 rate in the Summer. We strategically run the promotions around weak demand periods and in doing so bring our actual sale price in line with what equivalent lodging establishments in the area are typically selling rooms for. The customers get a perception of a great deal so it generally turns out to be a win for all of us.
This is not to say we don't have issues from time to time. One time we allowed the actual sell price to get too low. We were still making a profit, but it caused us to get some customers we really did not want to have. We learned a lesson and have always made sure the sell price is high enough to attract better customers. If we have to we add higher value extra's to boost the price up.
.
I did both LS and Grp on back in 2011/12 to assist in our slow periods.

In the beginning we negotiated a 50% off voucher, room + add-on that brought the voucher up to about 75% room rate. Commission was 40%. We had quite a few unused vouchers which turn into GCs = to paid price value. Our state has a 5yr expiry date (unless business lists longer). Only 2-3 used their GC (paid price value) after the special expired and all of those were used not long after.
As we wised up we negotiated a 40% discount and a 30% commission rate. We also make some vast changes in our offer, sold less but made more.

We found the lower the amount of the offer the more PITA's you will deal with. The reps agreed.

At the time, we needed the $ for a few things needed to be done. The advance payment helped us to get things done. So for that reason, we are glad we did what we did. No long term loans to deal with etc. Mostly filled rooms at times they would have been empty.
We did get a few repeat, full paying customers but not many.
 
Groupon is not for everyone for sure. We have been effectively using Groupon and Living Social for several years and in every single case we have made a profit. I would guess over the years we have had over 2000 customers come through our doors using these promotions. We only have 2 negative reviews from folks using these promotions.
We have found that most customers come once to use the promotion and never really return. That's fine because we will not do a promotion if the cost structure is such that we are not making at least a few dollars on every room, after the cost of labor. This does 2 things for us: During slower months it offsets some overhead. It also helps keep our housekeepers employed which lessens the chances they will find other jobs in the winter and not return. During the busier months we limit the usable days to our slowest days of the week, helping push our occupancy close to 100%. The incremental cost of the last few rooms is very small and the demand from that time of year is much higher so the profit margin goes up substantially.
We have obtained a number of regular and repeat guests. Now they do come back using new promotions sometimes (but they are more likely to upgrade to a larger and more expensive room), but they also book directly with us.
We have also found that about 20 to 25% of the vouchers are never used. We still get paid for these so the effective profit goes up.
We tend to get far more positive reviews from guests using these promotions than negative ones.
I understand it is a bitter pill to swallow, giving up so much perceived value, but the true value of an un-rented room is $0 and it can never be recovered. It's tough giving a large percentage to Groupon for the promotion, but ask yourself what it would cost to get the marketing that you will get from them? They are sending your promotion to hundreds of thousands of potential customers or more, who want to see what you have to offer. They get a lot of traffic to their website. It drives a lot of traffic to your website and it does drive a lot of sales. I know for us to penetrate the NYC market would be cost prohibitive beyond belief, but we can do it with this kind of promotion.
We have seen for the most part nothing but benefit over the years. Honestly we have more problems with customers booking through Booking.com or Expedia than we do with the flash sale promotions.
Having said all this we have been seeing a steady decline in the amount of business these promotions generate. We also provide different options, some may show as much as a 50% discount (with added in package items) while some options are less of a discount. We have never paid a 50% commission to Groupon and would suggest anyone wanting to try using them negotiate the commission down. I have had to walk away from deals and just tell them no to certain aspects. They will always push for more and you need to push back. Ultimately they can't exist without our products so many times they will come around with something more reasonable..
When they first contacted us it was to be included in the small city nearby. So, the first issue was we aren't in the city, there was no public transport at the time so you needed a car. They wanted us to discount the room 50%, not give them a 50% commission. They took 50% of the price the room was listed at, sending us 50%. But, it's essentially 25% of what the room was listed at on our website.
I'm not sure how my state handles vouchers, but at the time these offers were very popular, unredeemed purchased GC's had to be remitted to the state so there was no profit margin there.
We don't have staff so being empty isn't as big a deal. We just take the day off.
Part of the issue I had with the process is it tells the guest that you're making money at half off, even tho they had no idea we were only getting half of that. So, where's the value in paying full price? If we can succeed on half off, then we're gouging at full price.
It's good to hear a positive story, there were so many stories of very unhappy guests who couldn't get into the place they bought the voucher for, or the accommodations and the add ons were not as described. (And there were stories from innkeepers who were overwhelmed by the process and admitted they couldn't keep up with demand.)
.
Morticia,
When they first contacted us years ago they asked for the same thing as you described. We told them no because we would not be making enough profit to be worthwhile. We insisted (and still insist) that we package items of low cost and high value and we many times offer less than a 50% discount. You definitely have to be careful or you can lose money.
In our case our prices are more or less based on the demand the particular time of year. In the winter months we may sell rooms for $100 and in the Summer we may sell the same room for $300. Our customers are not booking because of how much they think we are making, otherwise they would demand the $100 rate in the Summer. We strategically run the promotions around weak demand periods and in doing so bring our actual sale price in line with what equivalent lodging establishments in the area are typically selling rooms for. The customers get a perception of a great deal so it generally turns out to be a win for all of us.
This is not to say we don't have issues from time to time. One time we allowed the actual sell price to get too low. We were still making a profit, but it caused us to get some customers we really did not want to have. We learned a lesson and have always made sure the sell price is high enough to attract better customers. If we have to we add higher value extra's to boost the price up.
.
I could never figure out how to add extras. It seemed like a colossal amount of work (extras I had to pay full price for) just to get $37.50 for the room.
I probably could have negotiated the commission as they were starting up in the area.
 
Groupon is not for everyone for sure. We have been effectively using Groupon and Living Social for several years and in every single case we have made a profit. I would guess over the years we have had over 2000 customers come through our doors using these promotions. We only have 2 negative reviews from folks using these promotions.
We have found that most customers come once to use the promotion and never really return. That's fine because we will not do a promotion if the cost structure is such that we are not making at least a few dollars on every room, after the cost of labor. This does 2 things for us: During slower months it offsets some overhead. It also helps keep our housekeepers employed which lessens the chances they will find other jobs in the winter and not return. During the busier months we limit the usable days to our slowest days of the week, helping push our occupancy close to 100%. The incremental cost of the last few rooms is very small and the demand from that time of year is much higher so the profit margin goes up substantially.
We have obtained a number of regular and repeat guests. Now they do come back using new promotions sometimes (but they are more likely to upgrade to a larger and more expensive room), but they also book directly with us.
We have also found that about 20 to 25% of the vouchers are never used. We still get paid for these so the effective profit goes up.
We tend to get far more positive reviews from guests using these promotions than negative ones.
I understand it is a bitter pill to swallow, giving up so much perceived value, but the true value of an un-rented room is $0 and it can never be recovered. It's tough giving a large percentage to Groupon for the promotion, but ask yourself what it would cost to get the marketing that you will get from them? They are sending your promotion to hundreds of thousands of potential customers or more, who want to see what you have to offer. They get a lot of traffic to their website. It drives a lot of traffic to your website and it does drive a lot of sales. I know for us to penetrate the NYC market would be cost prohibitive beyond belief, but we can do it with this kind of promotion.
We have seen for the most part nothing but benefit over the years. Honestly we have more problems with customers booking through Booking.com or Expedia than we do with the flash sale promotions.
Having said all this we have been seeing a steady decline in the amount of business these promotions generate. We also provide different options, some may show as much as a 50% discount (with added in package items) while some options are less of a discount. We have never paid a 50% commission to Groupon and would suggest anyone wanting to try using them negotiate the commission down. I have had to walk away from deals and just tell them no to certain aspects. They will always push for more and you need to push back. Ultimately they can't exist without our products so many times they will come around with something more reasonable..
When they first contacted us it was to be included in the small city nearby. So, the first issue was we aren't in the city, there was no public transport at the time so you needed a car. They wanted us to discount the room 50%, not give them a 50% commission. They took 50% of the price the room was listed at, sending us 50%. But, it's essentially 25% of what the room was listed at on our website.
I'm not sure how my state handles vouchers, but at the time these offers were very popular, unredeemed purchased GC's had to be remitted to the state so there was no profit margin there.
We don't have staff so being empty isn't as big a deal. We just take the day off.
Part of the issue I had with the process is it tells the guest that you're making money at half off, even tho they had no idea we were only getting half of that. So, where's the value in paying full price? If we can succeed on half off, then we're gouging at full price.
It's good to hear a positive story, there were so many stories of very unhappy guests who couldn't get into the place they bought the voucher for, or the accommodations and the add ons were not as described. (And there were stories from innkeepers who were overwhelmed by the process and admitted they couldn't keep up with demand.)
.
Morticia,
When they first contacted us years ago they asked for the same thing as you described. We told them no because we would not be making enough profit to be worthwhile. We insisted (and still insist) that we package items of low cost and high value and we many times offer less than a 50% discount. You definitely have to be careful or you can lose money.
In our case our prices are more or less based on the demand the particular time of year. In the winter months we may sell rooms for $100 and in the Summer we may sell the same room for $300. Our customers are not booking because of how much they think we are making, otherwise they would demand the $100 rate in the Summer. We strategically run the promotions around weak demand periods and in doing so bring our actual sale price in line with what equivalent lodging establishments in the area are typically selling rooms for. The customers get a perception of a great deal so it generally turns out to be a win for all of us.
This is not to say we don't have issues from time to time. One time we allowed the actual sell price to get too low. We were still making a profit, but it caused us to get some customers we really did not want to have. We learned a lesson and have always made sure the sell price is high enough to attract better customers. If we have to we add higher value extra's to boost the price up.
.
think it also helps if you have something else you can sell them when they are on site ie neighbour hotel does it but then they sell them £6 parking, £10 wi-fi, drinks in the bar, restaurant, prosecco in the room package, romance package and so on - add on's are where the mark up is and sold at full price. Also have staff they need to keep ticking over.
 
Groupon is not for everyone for sure. We have been effectively using Groupon and Living Social for several years and in every single case we have made a profit. I would guess over the years we have had over 2000 customers come through our doors using these promotions. We only have 2 negative reviews from folks using these promotions.
We have found that most customers come once to use the promotion and never really return. That's fine because we will not do a promotion if the cost structure is such that we are not making at least a few dollars on every room, after the cost of labor. This does 2 things for us: During slower months it offsets some overhead. It also helps keep our housekeepers employed which lessens the chances they will find other jobs in the winter and not return. During the busier months we limit the usable days to our slowest days of the week, helping push our occupancy close to 100%. The incremental cost of the last few rooms is very small and the demand from that time of year is much higher so the profit margin goes up substantially.
We have obtained a number of regular and repeat guests. Now they do come back using new promotions sometimes (but they are more likely to upgrade to a larger and more expensive room), but they also book directly with us.
We have also found that about 20 to 25% of the vouchers are never used. We still get paid for these so the effective profit goes up.
We tend to get far more positive reviews from guests using these promotions than negative ones.
I understand it is a bitter pill to swallow, giving up so much perceived value, but the true value of an un-rented room is $0 and it can never be recovered. It's tough giving a large percentage to Groupon for the promotion, but ask yourself what it would cost to get the marketing that you will get from them? They are sending your promotion to hundreds of thousands of potential customers or more, who want to see what you have to offer. They get a lot of traffic to their website. It drives a lot of traffic to your website and it does drive a lot of sales. I know for us to penetrate the NYC market would be cost prohibitive beyond belief, but we can do it with this kind of promotion.
We have seen for the most part nothing but benefit over the years. Honestly we have more problems with customers booking through Booking.com or Expedia than we do with the flash sale promotions.
Having said all this we have been seeing a steady decline in the amount of business these promotions generate. We also provide different options, some may show as much as a 50% discount (with added in package items) while some options are less of a discount. We have never paid a 50% commission to Groupon and would suggest anyone wanting to try using them negotiate the commission down. I have had to walk away from deals and just tell them no to certain aspects. They will always push for more and you need to push back. Ultimately they can't exist without our products so many times they will come around with something more reasonable..
When they first contacted us it was to be included in the small city nearby. So, the first issue was we aren't in the city, there was no public transport at the time so you needed a car. They wanted us to discount the room 50%, not give them a 50% commission. They took 50% of the price the room was listed at, sending us 50%. But, it's essentially 25% of what the room was listed at on our website.
I'm not sure how my state handles vouchers, but at the time these offers were very popular, unredeemed purchased GC's had to be remitted to the state so there was no profit margin there.
We don't have staff so being empty isn't as big a deal. We just take the day off.
Part of the issue I had with the process is it tells the guest that you're making money at half off, even tho they had no idea we were only getting half of that. So, where's the value in paying full price? If we can succeed on half off, then we're gouging at full price.
It's good to hear a positive story, there were so many stories of very unhappy guests who couldn't get into the place they bought the voucher for, or the accommodations and the add ons were not as described. (And there were stories from innkeepers who were overwhelmed by the process and admitted they couldn't keep up with demand.)
.
Morticia,
When they first contacted us years ago they asked for the same thing as you described. We told them no because we would not be making enough profit to be worthwhile. We insisted (and still insist) that we package items of low cost and high value and we many times offer less than a 50% discount. You definitely have to be careful or you can lose money.
In our case our prices are more or less based on the demand the particular time of year. In the winter months we may sell rooms for $100 and in the Summer we may sell the same room for $300. Our customers are not booking because of how much they think we are making, otherwise they would demand the $100 rate in the Summer. We strategically run the promotions around weak demand periods and in doing so bring our actual sale price in line with what equivalent lodging establishments in the area are typically selling rooms for. The customers get a perception of a great deal so it generally turns out to be a win for all of us.
This is not to say we don't have issues from time to time. One time we allowed the actual sell price to get too low. We were still making a profit, but it caused us to get some customers we really did not want to have. We learned a lesson and have always made sure the sell price is high enough to attract better customers. If we have to we add higher value extra's to boost the price up.
.
I did both LS and Grp on back in 2011/12 to assist in our slow periods.

In the beginning we negotiated a 50% off voucher, room + add-on that brought the voucher up to about 75% room rate. Commission was 40%. We had quite a few unused vouchers which turn into GCs = to paid price value. Our state has a 5yr expiry date (unless business lists longer). Only 2-3 used their GC (paid price value) after the special expired and all of those were used not long after.
As we wised up we negotiated a 40% discount and a 30% commission rate. We also make some vast changes in our offer, sold less but made more.

We found the lower the amount of the offer the more PITA's you will deal with. The reps agreed.

At the time, we needed the $ for a few things needed to be done. The advance payment helped us to get things done. So for that reason, we are glad we did what we did. No long term loans to deal with etc. Mostly filled rooms at times they would have been empty.
We did get a few repeat, full paying customers but not many.
.
Copperhead,
Your experience sounds much the same as what we have experienced. Once we got the process down it has become pretty easy and we treat it now just as another sales channel. It generates somewhere between 5 and 10 percent of our annual revenue so it's significant enough to keep doing for us for now, but it has been trending down so at some point it will no longer be worth doing. The first year we did these was probably around 2010 I think or 2011. It was right after the economy really tanked in our area and these promotions made a real difference to our bottom line. For us they worked best when we really needed the revenue.
 
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