Thursday, June 20, 2013

Don Juan Falls Short

ABC's The Lookout had an expose on a Groupon deal in the Dominican Republic that was actually more expensive than the rate offered for a similar room that was booked directly.

A deal for the Don Juan beach resort apparently wasn't such a good deal after all. Buyers always need to do their research. You should never take a merchant's value of a deal's savings at a published rate.

Thursday, November 15, 2012

Are Groupon Merchants Happy?

After another disappointing quarter out of Groupon,with its traditional non-direct bookings falling sequentially for the second quarter in a row, it's easy to wonder if the daily deals leader's merchants are getting value out of their promotions.
A recent Raymond James survey isn't all that encouraging.
Of 115 merchants sampled for the study, 39% said that they were unlikely to run another Groupon campaign. A whopping 32% of them also reported losing money on the deals. The latter metric may not be a big deal. Companies run Groupons to attract customers, so any payoff will take place if they come back down the road. However, a 39% non-renewal rate -- coinciding with a similar amount saying that Groupon was less effective than other ways to drum up new business, is a bigger issue.
Yes, the sample size is ridiculously small. It would be dangerous to extrapolate the findings across the company's 250,000 merchants. However, the latest quarterly report does validate the theory that merchants aren't coming back the way that they used to.

Wednesday, April 18, 2012

Is Groupon Being Swamped by Refund Requests?

What do Groupon and accountants have in common? They're both being swamped by refund requests this week, apparently.

Groupon's customer support boasts that it gets back to customer requests within a day of filing a complaint, question, or refund request, but that's certainly not what happened when I asked for a refund earlier this week.

Nearly two days after asking for a credit on a Groupon that was getting tricky to redeem, I got this email:

"Thank you for contacting Groupon. Due to the high e-mail volume, we are running behind our normal 24 hour response time. We are battling this volume with every tool we have at our disposal and feel confident that we will emerge victorious. This victory will result in a detailed response to your email, a swift resolution of your issue and a warm feeling in your belly."

Typical Groupon. It has a message to deliver, and serves it up with a bowl of wit. However, the automated response -- supposedly fired off because my initial email was already 24 hours old -- suggests that Groupon is having a hard time keeping up with the volume of customer support requests.

It has now been 24 hours on top of the original 24 hours. I wonder if Groupon will emerge victorious after all.

Wednesday, November 23, 2011

Groupon is Now a Busted IPO

Well, that didn't take long.

After just 13 days of be being publicly traded, Groupon dropped below its $20 IPO price this morning.

Non-investors shouldn't take this as a sign that Groupon itself is a failure. The IPO was simply overpriced. Groupon continues to grow at a heady clip. However, more and more people are questioning the profitability of the model. We'll see if Groupon bounces back.

Saturday, October 1, 2011

A Bridal Contest Scorned

Promotion cuts both ways. Just ask -- a small Groupon-esque website in Miami. In order to promote both its website and one of its deal sponsors, MyCotorra teamed up with a Coral Gables-based bridal shop to offer a free custom-designed wedding gown.

The lucky bride-to-be simply had to get as many people as possible to "like" her photo on the contest's Facebook page.

Social networking and social coupons were made for one another given their viral nature. MyCotorra figured that folks would tell their family and friends to vote for them, increasing local brand awareness. Well, the site got more than it bargained for, as it saw many votes coming in outside of its South Florida market and it began to suspect that some entrants were fraudulently purchasing "likes" to game the contest.

It's all explained here, but the story ends with the contest closing early. The prizes were awarded -- and a party with prizes for all contest participants was also held last week.

I'm not sure if I buy the "likes" purchase theory. I think MyCotorra simply underestimated that Facebook is a global site and nearly everyone on the site has friends outside of their home cities. Perhaps more importantly, once the call goes out for a "like" it's common for friends and family members to rebroadcast the request, further exposing the contest to those outside of a certain geographic area.

The moral of the story, as anyone that has seen the Filene's Basement "running of the brides" for marked down dresses, you don't underestimate how far a bride-to-be will go for a free or nearly free gown.

Monday, September 12, 2011

Are Groupon and Living Social Reputation Killers?

Is there a downside to going the social couponing route beyond the obvious financial hit?

Some Boston professors conducted a study, analyzing thousands of Groupon deals -- and then tens of thousands of Yelp reviews. They found that reviewers that mention the word "Groupon" in their review tend to rate an establishment 10% lower than the average. Those who mention both "Groupon" and "coupon" clock in with a shocking 20% lower rating.

I'm a bit skeptical on the findings. For starters, while it may seem that those using a Groupon should be getting better value out of the venue -- and hence handicap their ratings accordingly -- most are likely to rate the place based on what it would cost in real dollars. I see that as a problem, since many of these establishments are, in a sense, forced on the buyers. A Groupon buyer will go to a restaurant, spa, or store out of the obligation and deal. It's not like the non-Groupon customer that actually CHOSE to be there.

Check out the study if you want, and draw your own conclusions.

Sunday, August 28, 2011

Why Doesn't LivingSocial Allow User Comments?

Groupon isn't perfect -- no social shopping website is -- but at least every voucher has a commenting section for folks to ask questions, get answers, and gauge the opinions of others.

Where is that on LivingSocial?

Case in point: I had a $40 voucher that I went to use today at Strike Miami -- an upscale bowling alley that recently adopted its parent company's Bowlmor name. In the past I had gone there, rented a lane for an hour, and had a pretty good time. You pay by the hour there, shoe rentals (naturally) are extra. There's also a wide array of food and drinks available. There used to be an open area set apart from the 30+ lanes as a restaurant, and it's now enclosed as a lounge.

Strike Miami -- err, Bowlmor -- offered $40 worth of bowling for $20 a couple of months ago. Now, it's pretty clear that the $40 doesn't go toward food and drinks. However, I know that when I would go with my family of four for an hour that $40 would pretty much cover an hour of bowling and four shoe rentals. I figured kindly handing over the voucher would've resulted in a free hour of bowl toppling.

It was not. The voucher can ONLY be redeemed for an hour and 20 minutes of bowling. Shoes are extra. I can't simply bowl an hour and have a credit on the shoes.

I'm not going to complain about that. Bowlmor is a class act. I forked over my $20 plus tax for the shoes. I'll be back again without the voucher. However, I wish LivingSocial would've had a forum so this question would've been asked and ideally answered.

Groupon and LivingSocial hire word spinsters to crank out cutesy experience description, but they often leave out meaty details. Isn't that why we need comments? Even if the Groupon commenting sometimes erupts into a flame war between merchant and disgruntled buyer, at least there's fair warning.

What are you afraid of LivingSocial? You can't leave an open frame like that and expect to win.