Have You Been A Victim Of Grouponitude?

I’m as guilty as anyone for being sucked into the group buying frenzy.  Hey, a deal is a deal.  Of course I’m not sure what I’m going to do with all those massages and laser hair removals.

Lately however I’ve noticed a growing trend when using one of these deals that actually has me wanting to not purchase or use them anymore.  Grouponitude.  What is Grouponitude you ask?

grou ● pon ● i ● tude
n. a negative or hostile state of mind in response to the use of a group buying deal.  SYN. joy, appreciation,  acceptance, welcomeness

A Grouponitude encounter usually goes something like this:

Store Owner: Welcome to Old Franny’s Widgets & Stuff!  How are you on this fine and glorious day you wonderful human being?!
Me: Fantastic pleasant shop owner!  I’ll just take these 2 widgets, and some of this stuff!
Store Owner: I am appreciative of your patronage of this shop you handsome fellow!  That will be $25.67.
Me: Thank you. I happen to have this $25 Groupon for my purchase!
Store Owner: That will be 67 cents.  Thanks for making my family starve.

Okay, so I’ve embelished a bit, but it does represent these encounters quite accurately (OK, maybe not the handsome part).  It’s actually become quite an amusing experience just about every time.  I enter said establishment, purchase or receive said goods or services to a usually jovial and kind encounter, pull out my Groupon, and watch the disappointment wave over their face as if they just found out I was an ex-con or something.

I think a lot of business owners are not approaching group buying opportunities from the right perspective.  It’s not a quick fix, and it certainly isn’t a money maker.  It’s a loss leader, and the only benefit to using such a service is to increase your brand awareness, and introduce new customers to your products and services.  So here’s the thing, if you aren’t treating these customers with an amazing experience or product/service, what likelihood is it that they will return?  Pretty low.

If I ran a business and were to consider using Groupon or Living Social, etc., I would be damn sure I had a strong game plan in place to impress the hell out of these folks so much that they feel compelled to return for another visit without a Groupon.  Or at the very least, share their great experience socially.  You’re not going to win everyone over, and of course you’re always going to have the folks that are only there for the deal, but their will be plenty of opportunities to win over new customers long term.  And isn’t that the point?

Anyone else been the victim of Grouponitude?  Would love to hear your experiences.

Comments

  1. I’ve never actually used a Groupon or Living Social myself, but I have been on the other side of the counter.

    In my retail store, customer service is never sacrificed whether or not a customer presents the Groupon/Living Social voucher. We recognize the goal of getting the customer in, then wowing them with our amazing product/service. However, we certainly do experience a wave of disappointment someone hands us the certificate.

    It isn’t the consumers fault. Everyone wants a deal, and we understand that. The fault lies with Groupon and Living Social for not adequately preparing small business owners for the impact the coupons will have on their bottom lines. They sell their service/product very well. Small business owners looking for creative and inexpensive ways to advertise get caught up in what seems like an excellent way to market their business!

    So, too, is the business owner at fault. We failed to fully research the impact LS would have on our business. We should have talked to other business owners who had more experience than us.

    So, as a business owner, I appeal to those of you who happily and rightfully utilize Groupon and Living Social and any other of the sort… spend more than the value!! This is they way to eliminate Grouponitude!

    1. Tamara, great perspective from the other end. It doesn’t surprise me that they woo business owners and probably over promise or under deliver. I predict the group buying bubble is going to burst soon as people get overwhelmed with all the deals, and businesses no longer willing to work on such low margins.

  2. Great blog post! I’ve experience this situation myself. Groupon is an excellent tool to introduce your company to a new audience but if you’re product if terribly expensive, there’s a good chance you might not keep that audience.

  3. Great post, I think both you and Tamara are right. Business owners sometimes do not understand that it is not a quick fix or a way to make money. They should view it as an advertising cost. A cost that they can trace and brings the consumer directly to them for a chance to sell them on their other products or brand as a whole.

    I’ve seen it go both ways but luckily I’ve had mostly good experiences. My most recent one is for POW fitness. I went in with my Groupon to get my punch card for 5 free classes and they gave me great customer service and explained how their gym works without being pushy.

  4. Great article!

    I’ve been a user of GroupOn on a number of times over the last year, and have started noticing the effect more and more. It seems unfair that a business chooses to use GroupOn then takes out their frustration on the customer – surely that’s only discouraging repeat business at full price?

    As an example I recently purchased a voucher for a local restaurant. They were lovely on the phone until I mentioned the voucher at which point the gentleman’s tone changed, there were suddenly no tables available until after the voucher expired, and he essentially put the phone down (GroupOn have refunded my money). The company had clearly oversold themselves. Well, lesson learned I thought, they won’t do that again! Except they did. The voucher expired 2 days ago and today they have released a new GroupOn voucher. Needless to say I will probably not be inclined to ever visit that restaurant or recommend it to anyone.

    In contrast on a previous occasion I used a voucher at a different restaurant, who were fantastic, no sign of Grouponitude at all. I have been back there 3 more times, and given them a 5* Trip Advisor review.

  5. I think that it is easy as a customer to go into a small business with a voucher and expect/demand a high quality of service, unfortunately I feel that it must be very hard to put a smile on your face when you are losing money from a transaction.

    Groupon have been found to have a number of dodgy tactics to pressurize and lie to small businesses in order to push them into more than they really want and can afford. This article http://techcrunch.com/2011/06/16/groupon-sales-merchants-freaking-out/ includes emails from a former Groupon employee who states that they would often push businesses into more than they really want, leave them to run numbers themselves, often change deals at the last minute and more. The Groupon sales representatives work on commission so will often “advise merchants to sell more Groupons than the business is able to handle, mostly by low-balling the estimate of how many will sell”.

    I have read a lot of articles from the other side where Groupon have almost sent businesses out of business from their pushy tactics.

    Just something to bear in mind next time you walk into a small mom and pop store, brandishing your 25% off voucher and their faces drop. Chances are your attempt at penny pinching may just being be the push that forces them to lose their livelihood.

    1. Hi Paul. Thanks for stopping by and sharing your opinion, but I couldn’t disagree more. If you run a business, it is your responsibility and know how to be savvy enough to walk away from a bad deal. If you are easily persuaded into a bad one, then you have other issues you need to work on as a business owner.

      I also think it’s a bit crass to imply that those that use Groupons or the like are “penny pinching” anyone. Regardless of whether a business owner is thrilled with accepting a deal they put out there, if they really are a savvy business owner, they would know to deliver at least the same level of respectful customer service anyone else would be accustomed to. At the very least to potentially have that customer return as a full paying one.

  6. Great post!

    As a business owner I’ve used groupon & daily deal sites numerous times. When groupon 1st came out I had a pretty good conversion rate. Now that there’s so much of that sh*t out there your lucky if you get 1% coming back.

    I’ve been preaching to fellow business owners to STOP using daily deal sites as way to save your business. In the end of the day its about treating your customers like VIP & offering them VIP only specials to keep them coming back.

    I’m not against running a deal just not with a daily deal site. I always told small business owners if you MUST use it then you better have the capital to make up for the lose & an extremely good conversion system.

    In the end of the day when a customer comes in with a groupon they already have bought at least 5 similar ones to jump from deal to deal.

  7. Great post!

    As a business owner I’ve used groupon & daily deal sites numerous times. When groupon 1st came out I had a pretty good conversion rate. Now that there’s so much of that sh*t out there your lucky if you get 1% coming back.

    I’ve been preaching to fellow business owners to STOP using daily deal sites as way to save your business. In the end of the day its about treating your customers like VIP & offering them VIP only specials to keep them coming back.

    I’m not against running a deal just not with a daily deal site. I always told small business owners if you MUST use it then you better have the capital to make up for the lose & an extremely good conversion system.

    In the end of the day when a customer comes in with a groupon they already have bought at least 5 similar ones to jump from deal to deal.

    I even did an article about that here http://bryanortizconsulting.com/2012/02/the-ugly-truth-behind-daily-deal-sites/

    1. Great comment Bryan. I agree that the daily deal sites are going to crash eventually. I think a better model as always been rewarding customers for their repeat business and referrals rather then the daily deal model.

      1. When I go to a business i want to be helping to grow that business. So daily deals doesn’t appeal so much to me as a consumer.

        Like to hear more ways to reward and track repeat customers. Or some advice on how to attract people looking to earn money from affiliate programs. Is that the only way to motivate people to make referrals?

  8. I think maybe you’re feeling a little “cheap” for using this coupons and transferring your discomfort onto the store employee.

    Why would a store do a Groupon, and then get mad at people for using it? Doesn’t add up.

    I hope the bubble bursts soon. As a small business owner, AND a consumer, I hate Groupon. It’s not a sustainable business model and I can’t wait for it to die.

    1. I agree some what. I don’t mind the calls I get when the deal runs. What I do get upset is when the deal is about to expire & ppl call to use. That’s when you can tell they aren’t repeat customers.

      Groupon will def go under like most of the dot com’s in the 90s.

      Pretty much every business owner I know that ran a groupon said it was one of the worst decisions they ever made

    2. The only reason a person would feel cheap for using a Groupon, is if the employee or owner acts in a way to make them feel that way. Sorry, Daphne, no transference here. This was not an isolated incident, I’ve encountered it on numerous occasions.

  9. I have never used one of these deals face to face, only online.
    I have been approached by these group companies offering me to participate in their offers. I have not to date. I feel I do not want to crowd source my Designs since they are very individual and I want to deal with clients that truly appreciate what my Roses represent and not just a bargain.

  10. I’ve only used Groupon for Fandango deals, but I will not use Restaurant.com because I’ve had nothing but this attitude you describe. Happy happy happy, to back of the restaurant seats, cold food & cranky wait staff. It’s bizarre.

    The worst time was when I, who will eat nearly anything, had to send my plate back to the kitchen. I can count 2 times in my entire life I’ve sent food back. When I still could not eat it (room temperature seafood? I have to draw the line somewhere), taking that plate off the ticket meant we couldn’t use the voucher.

    You’re correct, it’s a shame that the Groupon/Restaurant.com businesses don’t know what they’re getting into when they join forces. I’m a very loyal customer, I’d love to stick around. I don’t think this is in your head or that you’re transferring your feelings.

  11. My wife owns a small biz and did a Groupon a while back. I don’t think she’ll be doing another one anytime soon. It is a HORRIBLE tactic for small biz. And it is never a tactic that is going to make money. Never. So yes, I have hear from many who have suffered from Grouponitude :). Great post.

  12. I still go for Groupon. This is a big discounts for customers. Small businesses shouldn’t engage to this if they only blame the customers whose using the coupon.

  13. I’ve been in your shoes, Jason! And I’ve lost out on purchased deals because the merchant can’t fulfill before the expiration date. No more Groupon-ing for me. Thanks for the post.

  14. Good thing I never been a victim of Grouponitude. and I don’t have any intention of grabbing any of this. Thanks for sharing some insights about it Jason, we are more aware to this kind of scam, if we can call it scam.

  15. I have never used groupon but I know for a fact that most of those deals are just made for losses:P wrong calculations, etc.

  16. I found this funny though. :) Anyway, I haven’t experienced this before. Thanks for sharing this.. Good job!

  17. This is the first time I’ve actually heard of the term Grouponitude (did you coin it yourself?) because I find it really apt and relatable! I’ve never found myself purchasing Groupons and such for the fear of Grouponitude but I’ve heard about it one time too many times from friends and family who have gotten such deals and had nothing but criticism for the participating merchants. I’m definitely not going to be getting any Groupons any time soon, no matter how good the deal is!

  18. You must keep in mind that Grouponitude goes both ways! When I worked as a restaurant manager, we dreaded the Groupon crowd because we’d just been burned one too many times. First of all, the people you are interacting with are not the same people who decided to run the deal, so it’s not fair to say that they are to blame for an owner’s bad marketing decision.

    Often, staff are under-tipped, verbally abused, and wrung out for “Value” long before they start dishing that attitude back out. You would not believe what some of the Groupon hoards have said and done to my team, and many of them do not come back until there’s another deal.

    I’m with the “just don’t do it!” crowd. Buying or selling– it’s not worth it.

    Bah. I get way to worked up by Groupon.

  19. It is interesting being on the other side of the counter, agreed that Groupon can be a nice bringer of business, but what of those customers that ONLY purchase from you using those Groupons? Try us out, if you like us buy from us… don’t only wait for the repeat of a Groupon.