First of all, I don’t hate Groupon. I just want to break the transparency here.
& I’d like to publicly answer this question so that you all can know what it really means to be on the merchant side of Groupon.
Customers usually phrase it like this: “did you know that we can all pay half the price you’re charging if we get a Groupon for your competitor? One of those big national chains? What is it called.. Paint Nite? Wine and Paint? Cork and Paint?”.
Yes, unfortunately I know that.
Occasionally, I’ll get, “you know honey… you should really put these classes on Groupon, and your studio would be sold out and full every night! Trust me, I see these types of things on there all the time”.
Yes, unfortunately I hear that a lot, and I appreciate all feedback.
I ALWAYS want feedback, both negative and positive, because I think it’s the most influential and important aspect of great customer service.
While I know that Groupon is a great tool for many different types of businesses, here’s the answer I’ve been holding off on announcing because I didn’t want to come off as overly-confident and snarky. But now, after almost 2 years of busting my ass to get where we are, I actually don’t care about sounding overly-confident, so here you go:
My art studio is worth more than a Groupon.
Groupon requires that you run [at minimum] a 50% discount from the cost of the service or product.
Then, Groupon takes 50% of that amount, IF the voucher is used.
If the voucher is never redeemed and eventually expires, Groupon takes 100% of that.
Pretty flawless business model.
I can see how Groupon would be great for other small businesses, but in our hard-working & friendly-staffed studio, I believe a visit for a 3 hour painting class is worth more than $7.
Groupon merchants are each assigned a sales rep who recommends the amount of money their vouchers should be. This is based primarily on gaining the profits for Groupon itself, and the sales rep is technically not qualified to be making these judgements based on the business’s best interests and growth (that’s why they’re not). I remember when I tried working with Groupon last year, the representative tried to convince me to run a 80% discount. Scheduling these “deals” on Groupon are run based on what will optimize Groupon, not their clients. Right down to the percentage of the discount, how many people purchase it and do not redeem it, and the timing of the “daily deals” emails. This would have meant that my business would receive $3.50 per customer- which does not even cover the cost of 1 canvas & some paint.