4 Reasons Why Groupon Was Destined To Fail
Groupon only works in theory. When it was launched in November of 2008, deal finders of the world rejoiced because Groupon was the answer to our deal-of-the-day website prayers! Everything from half-price on a slice of pizza to a decent discount to a fancy spa or even a trip or 4 to go bungee jumping. Whatever you wanted a deal on, Groupon had it. Now, 5 years later, the glory has faded and the truth about Groupon is becoming clearer. Here are 4 reasons why Groupon was destined to fail.
[success]1. Quantity over Quality[/success]
As countless Groupon reviews will tell you – once you go into a business with your Groupon, more often than not, you will experience a decrease in service and/or product quality. While the website is supposed to work as a sales promotion tool for businesses, it ultimately only brings in a wave of customers who are only there because they have Groupons and realistically don’t plan on being regular, full-price paying, long term customers. Business owners know this and for many of them – because they’re already in this Groupon mess – decide they simply don’t care about you because let’s be honest, you’ve probably walked by this place a million times and never gone and the only reason you’re here now is for the deal.
[framed_box width=”0″ height=”0″]Related Topic: MyTime- A new app for booking appointments online[/framed_box]
[success]2.Early Peak[/success]
Within it’s first year, Groupon accumulated a total of $94,000 in revenue. That’s an amazing start and the company did manage to grow at lightning fast pace, managing to collect over $644 million in revenue per quarter by 2011. At one point it was even considered the fastest growing company ever. Unfortunately, that’s where the success for Groupon seemed to stop. Now, it’s revenue is steadily plummeting (stock in the company has lost a whopping 30%) and it’s getting increasingly harder to convince investors to stay.
[framed_box width=”0″ height=”0″]Related Topic:Do’s and Don’t of Online Reviews [/framed_box]
[success]3. Investors Jumping Ship[/success]
It didn’t take long for people to get over the Groupon craze, but investors in the company were still hoping for a miracle. Fast-forward to now and you’ll notice that investors are jumping ship left right and center. It doesn’t help the fact that nearly every business magazine (both online and print) have called out the Groupon business model as “crummy”, “poorly developed”, and even “loansharking”. One article even suggested that only businesses on the verge of bankruptcy should consider Groupon as a money-making tool…ouch.
[success]4. Outgrown Usefulness[/success]
To be completely honest, smart small business owners don’t need daily deal sites like Groupon to reach out to customers. Many realize that it’s a quick cash grab that rarely work out, so why not invest some time and money into long term solutions? Social media is being used by small businesses to gain a following, reach out to customers one-on-one, and can easily do self promotion through these platforms.
I believe Group model is not working anymore and there are many new companies that are trying to bring a new working model to the table. People are looking for more sustainable model so they can get good service while saving money. I came across MyTime less than a month ago and I think they can definitely fill in the gap. MyTime is an appointment booking site for small businesses and you will love them, so check them out here: http://www.mytime.com
You can also watch Their CEO Ethan Anderson interview here: http://pandodaily.com/2013/03/15/could-mytime-be-a-groupon-that-works/
Best of Luck