Tuesday, June 14, 2011

Groupon Should Not Be Trusted Without A Well Formed Plan

I thought that Groupon was pretty much a turn-key system, but business owners might disagree. Read the remainder of my blog entry for more info.

Jessie, of Posies Cafe, blogged about her experience in running a Groupon campaign. Be sure to read about her experiences before even contacting Groupon. Her experiences demonstrate that Groupon could be technically innocent, but that will not prevent them from walking away with lots of money, while you business owners suffer loss. None of her experiences would be a deal-breaker in my book, but that is cold comfort, in my books.

If you are pressed for time, then read TechCrunch's interview with her, and the summary of the lessons learned. If you are still happy with the idea of Groupons, and other group purchase sites, then read about the past of Groupon's chairman.

Like I said, none of this is automatically a deal breaker. The issue is whether or not you understand the business model, and whether or not you can profit.

The nature of this seems to be similar that to gift certificates. Be sure to gain some experience in dealing with gift certificates before you attempt a group purchase campaign. If you have never handled a gift certificate before, then give your employees each a $10 gift certificate, and encourage them to cheat the system. The main restraint that you must give yourself is not recognizing their faces. The idea is that they represent people that come into your shop, and you would not be able to recognize them. You know that they are cheating, but how do you prove it?

My suggestion is to place a password on each gift certificate, and then take down an ID when somebody cashes it. The user must prove that he is entitled to it.

If you are already offering the customer a great deal, then it is not too much to ask for the customer to help out.

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