The money is actually coming out of the merchant's pocket. However, most people participating in the deal don't get that.
More transparency in how the fees are broken down would reveal the information. For example, Ticketmaster shows the face value at $50.00, the discount to $25.00, with and even split of payment to the business and Google Offer services of $12.50 each.
People would be up in arms and complain about the fee just as they complain about Ticketmaster fees. You need to keep this information in mind when you look at the results of surveys. For example ForeSee asked more than 22,000 online shoppers about their use of Daily Deals.
They found that:
- Groupon is the most popular daily deal site by a 2 to 1 margin over the next competitor, Living Social (51% of respondents vs. 24%)
- About 2/3 of daily deal subscribers actually bought a deal, and that is regardless of price.
- Daily deals bring in new business. Nearly one third of those redeeming daily deals were new customers. 27% were infrequent customers, while 38% were frequent customers (this is the group is worrisome, since they might have bought anyway at higher prices).
With a bit more information, you can see how, as buyers, you can make a difference. Here are some ways to do that. Small business owners help you qualify how you can earn exposure without hurting your business further. Think about:
- your price point
- limiting the deal
- having enough staff on hand
- educating buyers on how the deals work
Another study from Rice University's Jesse H. Jones Graduate School of Business found that consumers who use the deal-of-the-day web site don't make return visits to the businesses offering discounts, don't spend much and don't tip well.
Dholakia's suggestion to businesses wanting to give Groupon a – or another Daily Deal – try it very much in line with my own: Use the website to build relationships instead of one-time transactions. It surprises me how organizations constantly forget their own sites in favor of social media.
Your best customers buy experiences, not price. That goes directly to your business model or creating a platform for an experience.
Another point for business owners to think about is that you really need to know your audience to make the Daily Deals work. For example, while unattached GenYs may take advantage of airline deals, how do you get lazy shoppers used to buying online to "on the street" deals?
Who's actually taking advantage of these deals? And not just signing up, then not going. What do you say? Take the polls.