I’ve purchased quite a few “deals” from both Groupon and LivingSocial. Restaurants, entertainment, etc. I allow(ed) both companies to spam my inbox multiple times daily. Most of the offers are not even close to relevant to me (massage? facial? really?) but occasionally I get a compelling offer and buy it. And we’ve all read articles about how these services are not good for businesses.
But there’s a bigger issue for Groupon and LivingSocial: the deals aren’t good for customers. Every time I’ve tried to use one of these vouchers, it’s unpleasant. Best case it’s a hassle, worst case I end up losing the money altogether. I can’t schedule the entertainment on the voucher because the only time slots that fit my schedule are full. The server at the restaurant or bar is annoyed that I’m not paying cold hard cash. Pretty much everyone I ask has had similar experiences.
i.e. the reason the deal is not good for the customer, is that using the voucher is not good for the business. And using it makes the business grumpy. The end result is that I’m annoyed with the business, in fact making it less likely I go again or recommend to my friends. And definitely less likely I continue to use Groupon or LivingSocial.
Not much different than the impulse-purchase coupon books sold door to door in the 70s and 80s. The business model only works if buyers fail to use most of the coupons in the book.
I for one would have continued to spend if the experience was positive. Like most of my friends, I’ve cancelled both. There is still room in this space for someone to do it right – but like any successful business, it must start by creating real value for customers.
Wonder if Andrew Mason will try another chance at bat and start a new one?!