I don't understand how anybody who knew anything about the business could think that this was sustainable. Groupon was exploiting hapless business owners that haven't yet been burned by sleazy marketers.Īs soon as the too-good-to-be-true deals became less frequent, Groupons customers also started leaving. So they saw huge growth at the beginning. In the beginning, with all the hype, that was an easy task. So the success of Groupon was based on finding new, unsuspecting businesses who could be talked into offering such a sweet deal. Of course, no business owner in their right mind would ever agree to such a crappy deal a second time.
It was a really shitty deal for the restaurant, but it was a fantastic deal for groupon - they got a 50% cut for selling a ridiculously cheap meal. So over the next 6 months or so, every day a few people would show up, redeem their Groupon to get their 40€ meal, order no drinks, and never come back again.
The Groupon sales person promised them that this would be great advertising, that people would bring their friends, and that they could sell fancy drinks and cocktails to the guests, so they would make a lot of money. But Groupon took 50%, so the restaurant owner got only 10€ per sale. They offered a 40€ dinner for two at a 50% discount for 20€. They hired lots and lots of sales people, whose job it was to convince unsuspecting businesses to offer a groupon.Ī restaurant owner I worked with agreed to run a Groupon. Groupon felt a bit like a multi-level-marketing scheme to me.
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