[fijal]

Hi Andrew, thanks for taking your time.

Since you're trying to capture it in one place, there is a comment hidden down with ctiticism that you did not capture in your list, here it goes:

"unclebucknasty 3 hours ago

That and the fact that those customers were Groupon's customers, not the businesses'. Their loyalty was to Groupon and the never-ending stream of discounts they provided. OTOH, the businesses that offered the discounts were essentially commodities in the scheme. They created the value via their discounts that Groupon then sold to customers. Few cared about the businesses, as people were not buying the underlying service or product from those businesses. Instead, the product was the discount itself, which they were buying from Groupon."

[andrew]

IMO that just seems like an elaboration upon / the reasoning behind "groupon customers are bargain hunters and won't come back", yes?

[fijal]

I think there is a distinction here between "groupon customer" and "business customer" highlighted in that comment that goes beyond the term "bargain hunter". You can still have bargain hunters that would only come to your shop once you display 10% off or once you're selling out stock that did not go away, but they still bring value to your business. That's different than a situation where neverending stream of discounts means you can change your provider as long as you're loyal to groupon.

That might be just word semantics that I'm missing, but I think there is a major distinction.

[unclebucknasty]

fijal is correct that I meant something much more fundamental than the bargain hunter problem.

Groupon's core selling proposition to businesses is that it will bring them people who can be cultivated into loyal, long-term customers. However, it's something of a fallacy because those customers are loyal primarily to Groupon. In fact, Groupon is actually a hyper-competitor to its business customers.

It's not just semantics or an issue of bargain-hunting. The model itself actively works against the core promise it offers to businesses.

BTW, while I'm not much of a Groupon fan, as a fellow-CEO whose tried something new and taken a lot of flack for it, I'll offer a little unsolicited advice: Don't let 'em get you down.