A recent article was entitled, “Groupon’s Fall to Earth Swifter than its Fast Rise” (link below or google the title, as I find these article links often change).

There’s no reason to pile on to the criticisms contained within the article, but suffice to say, it made an interesting read from the standpoint of a business. Consumers likely do win—in an arguably unsustainable way—but the conclusion for businesses is less certain. I think that clear-headed thinking, perhaps using the Socratic method, would help businesses discover that they probably already know the rational answer to whether or not such a promotion is a good idea:

• You’re selling $50 worth of products or services to a consumer for $25, and from there, you only net $12.50 minus a 3% exchange fee. Does it sound like a good idea, selling $50 worth of product/service for $12.13?
• You’re waiting for up to 90 days to receive that $12.13. Does this sound like a good idea for a cash flow-challenged small business?
• A large number of customers is no doubt exciting, but when they all descend upon your business during a short time period, will you and your team be prepared to bring out the A game? Or will it be chaotic? Will you leave these first-time customers with the best possible portrayal of your business?
• Do you think that consumers that scour the web only for rock-bottom discounts are apt to come back and visit your business again?

I’m concerned that negative experiences associated with these sorts of coupon offerings may sour businesses to coupons overall.

Coupons should be structured in such a way that a business is happy to see them redeemed: A good coupon is a way of offering a customer a little something extra and improve the customer experience (a large size coffee for the same price as a small, a free dessert) at a modest cost. A business should be happy to see these sorts of offers redeemed because they’re building blocks of long-term, positive relationships. When coupons become divorced from genuine business development efforts, and become vehicles of embarrassing greed, then both consumers and businesses stand to lose, long-term.

http://news.yahoo.com/groupons-fall-earth-swifter-fast-rise-184713324.html;_ylt=AsUQH.aDa5jt38CGGdpftUOwag8F;_ylu=X3oDMTRocThvMDRiBGNjb2RlA2dtcHRvcDIwMHBvb2xyZXN0BG1pdANOZXdzIGZvciB5b3UEcGtnAzhhMGFkYTdmLWYyOGEtMzUzNy04ODVlLWFlZDhmMmEyNDlkMgRwb3MDOQRzZWMDbmV3c19mb3JfeW91BHZlcgM0ZmM0YWY2OC1mYzE4LTExZTAtOGQ2NC1kZmJiY2U2YjA5NDM-;_ylg=X3oDMTJ0YjA3NmdmBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDMGZjZWZlMjgtNzkyMS0zN2VjLThjZDEtZjBmMzk5OWEzY2M3BHBzdGNhdAN3b3JsZHxhc2lhBHB0A3N0b3J5cGFnZQ--;_ylv=3