Groupon users ‘stingy’ say participating merchants

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Why the lack of enthusiasm to continue offering Groupon deals? Because, said 78% of merchants surveyed by Cooper Murphy, people who flock to the group buying site are more ‘stingy’ than regular customers and repeat business is ‘unsatisfactory’ (82%).

Far from building a brand or clientèle it appears group deals are attracting opportunists out for a bargain but who are unlikely to become regular customers or spend anything more than required to benefit from a coupon.

Another study also revealed the same buying behavior. Rice University found that while 80% of people who purchased a daily deal were new customers just 1 in 5 came back to make a full-price purchase.

Furthermore, Rice found a relatively low percentage of redeemers (35.9%) spent more than the value of the deal at the time of redemption.

“The businesses that we see spending their marketing dollars on daily deal sites have dramatically cut their advertising budgets,” said Utpal Dholakia, associate professor at management at Rice University’s Jones Graduate School of Business.

“This is a problem for businesses, because they’re not building their brand when they offer discounted prices for their products and services. Only about 20% of customers using daily deals return to businesses to buy at full price; customers acquired through other programs typically have much higher rates of full-price repurchases.”

What has been your experience of implementing a group deal campaign?

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ABOUT THE AUTHOR

Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
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Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.