When I was first introduced to the group buying concept, I was NOT totally blown away by its efficacy to generate massive buying response. Afterall, its pure common sense that who wouldn’t want to buy something that is way above 50% discount (sometimes even 90%) for a good product that is meant for full paying customers. Its a no brainer.
And when I did my research and read comments on Groupon’s business related problems, I was rather shocked at the level of expectations of these retailers have. There are even anti-groupon threads growing within the social networks everyday. Mind you, the stats on groupon’s site is showing that 95% was satisfied with their experience, 95% would use the service again and 96% would recommend Groupon to other businesses. Now wait a minute….how come?
I finally realize, it was not the group buying concept that was the underlying fault that makes the business model unsustainable. For some reason most groupon-like sites did not manage to mentally prepare their merchants for the execution of the deal which lead to some dissatisfied customers and merchants themselves.There were some facts that were not revealed that had the merchants thinking otherwise.
All these issues can be ironed out with careful planning, transperancy and assistance from your group buying advertising company. In other words you will want to work with group buying advertising companies that work with you as a partner in business and not the ones who just bring customers to your doorsteps and call it a day.
Being a $25 billion dollar company, Groupon has indeed acknowledged these problems earlier this year by engaging and supporting their merchants through the launch of their new merchant services division, helping them to grow their businesses successfully. According to Ryan Miller, Groupon’s director of operations, it is the key to the company’s sustainability.
I wonder what took them so long.