I’m Tired of One Night Stands

At the risk of mixing metaphors, Luke Hohmann recently described Groupon, Living Social and other daily deal sites as enticing businesses into one night stands.  At first I laughed but as I thought about my direct experiences with a plethora of group buying sites, I think he may be right.  There is no doubt that these daily deal sites can deliver a deluge of coupon-grubbing customers to a small, local business’s door step.  But at what cost?  Negative margin, stretching service delivery to breaking point, alienation of regular loyal customers, attracting customers who don’t spend more than the deal amount and won’t ever come back are some of the well documented potential pitfalls.  (And hopefully not STD’s!)

I often describe Groupon, Living Social and other daily deal sites as providing small businesses a large, fishing drift net to cast broadly into the ocean; the result is you will no doubt collect a lot of sea life, but only some of which will be the targeted species you are actually fishing for.  Luke’s metaphor is certainly more colorful and may, in fact, be truer than mine.

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