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.