Voucher Sites

Hey,

Soo recently I have been sllllightly addicted to Groupon....
If you're not aware Groupon is a site which users can register in order to receive discounts on products and services in their local area. You receive an email every day (I think) with offers and can purchase the vouchers straight from the email. I get three- one each for Portsmouth, Bristol and Manchester!

They have ridiculous discounts off days out, beauty and hair treatments, gifts and holidays. Obviously the site is great for consumers as they can get vouchers for up to 80% of the recommended retail value. In order for the coupon to be “active” a minimum number of people must purchase the coupon, which means that if enough people don't sign up to buy it- no one gets the offer.

Retailers, restaurants and beauty salons set up the offer with groupon, whilst they provide the marketing, client base and sales. Clearly this provides them with exposure, awareness from their target audience and new customers.

But how beneficial is the use of groupon for businesses??

Groupon splits each voucher sale 50/50 with the provider of the service, so for a haircut which might have a retail value of £40, sold on groupon for £15- the retailer receives £7.50. I doubt this covers their costs, so it is a risk to take in order to market yourself.

I would be interested to discover how many of the groupon voucher buyers actually return to the retailers and pay full price at a later date for the same service they received at an 80% discount....
To be honest I doubt that the kind of consumer that Groupon attracts is the type to want to pay full price.Often, the vouchers offered are similar week-in week-out from highlights and a hair cut to super car experiences, therefore when I'm using Groupon I would rather wait a few weeks for the voucher I want to be posted rather than pay full price at a salon I may have visited previously.

I suspect many consumers or 'bargain hunters' may use the same tactic, therefore I question whether groupon can provide a positive return on investment for companies. However, it could suit companies that have low variable costs of goods sold e.g. events, museums, spas, etc – where adding one additional customer does not add a high cost for the business.

I would be interested to see the ROI from companies which have used Groupon and other similar voucher sites in order to promote their services. I might be pleasantly surprised......

Just my thoughts,
Steph