Discount coupons attract current customers (who now pay less) and price shoppers/switchers. Whether they are FSIs or Groupons they still produce the same result: the coupon distributor makes money, the retailer or product/service provider of the discount, hoping to induce trial to create a new customer, is disappointed. But, they do get a blip in sales, which must look good on those new-fangled marketing accountability reports.
According to a recent article in the New York Times, “Coupon sites are fizzling out.” They note that while daily deals were all the rage, it is now so yesterday. Once more retailers and product suppliers are re-learning that discount coupons do not attract the right new customers for your business. Even if they were attracted using Web 2.0 (or 3.0 or whatever).
The Internet coupon sites are even a worse deal for the merchant. Offering a 50% discount and then keeping 50% of that, so the merchant gets 25% of normal revenue on the sale. But it is less expensive than other marketing methods to attract new customers. That would be true if it actually attracted new customers. But read some studies on who uses coupons and you’ll see why that is a pipe dream.
If it seems too good to be true…
Mitch
Michael, enjoyed your post! Companies need to realize that gimmicks like coupons never work over the long run. Those organizations that are successful understand that people are the key differentiator between your company and your competitors. Those businesses that have frontline associates that care about customers and make their customers feel welcomed, important and appreciated on every encounter don’t need Groupon or any other incentive. Richard Shapiro, The Center For Client Retention
As a bargain hunting consumers, I’ve been disappointed in Groupon and other coupon deals. I’m mostly interested in restaurants and have discovered that most of those that offer coupons get bad reviews, largely for being overpriced. Some of the conditions also border on fraud such as offering three appetizers up to $13 for a putative value of $39 when only one appears on the menu at this price with most in the $7-8 range.
I also don’t understand why any company that doesn’t expect repeat business would offer such a coupon. In my area, I could get a large discount on learning how to get authorized to carry a concealed weapon. (I’m not making this up.) But this certainly doesn’t sound like an offer with much repeat business potential.
With some exceptions, I have come to regard Groupon, Deal Chicken, and other coupons as an invitation to a bad customer experience. I will end by saying that I have purchased two Groupon coupons, but I already knew and liked these restaurants.