The problem that Groupon has to overcome is making a sustainable business out of an unsustainable marketing model. In reality, daily deals aren't allowing brands to develop deeper, more engaging business to customer relationships.
However, with the proliferation of viral media and marketing and an increasingly social internet, they may find a niche of companies that truly benefit from the products Groupon offers.
In reality, daily deals aren't allowing brands to develop deeper, more engaging business to customer relationships.
Couldn't agree more. Businesses need to pursue metrics around customer-lifetime-value with a vengeance. Once they do, they'll realize non-incentivized campaigns convert better.
The Groupon trend reminds me about this anecdote from 'Switch' (by the Heath brothers), about how given a larger bucket of stale popcorn, the audience always ate more. I know of folks who now find it painful to buy something (services, food etc.) at full price. The implications are immense -- there's been a permanent & massive shift in consumer behavior.
Also, there's tons of folks starting small businesses increasingly, to keep re-fueling the groupon's of the world.
A note on this from a wildly successful hedge fund manager friend of mine -
"In my mind, there is very little fundamentally concerning here - sure, growth is slowing and conversion stats slowing but all the negative hype looks massively overblown by startup techies who don't understand retail/couponing/restaurant businesses. Based on metrics, Groupon is still a phenomenal business that is growing rapidly"
