I thought this bit was a bit condescending, and starts the response off on a sarcastic note:
There have been a handful of stories lately documenting the struggles of cupcake
shops running out of batter or sushi restaurants who don’t have enough rice to
meet the demand brought on by their Groupon feature.
I possibly missed a Groupon story or two, but I don't remember any where stores ran out of ingredients - the problem is not so much that they can't satisfy the demand (though there is some of that in some cases) but that it's a cost sink that didn't generate the promised increase in "regular" customers.
> I thought this bit was a bit condescending, and starts the response off on a sarcastic note:
I didn't read that as sarcastic or condescending, but maybe it's because I already spent time watching all the Groupon site videos? There vibe is pretty friendly, lighthearted, and helpful - I bet there actually was a cupcake place that ran out as a notable experience, and that's why they write about it.
> he problem is not so much that they can't satisfy the demand (though there is some of that in some cases) but that it's a cost sink that didn't generate the promised increase in "regular" customers.
This is true, yes. I think a business owner should look at their desired customer base - the bagel shop it's a great play, because everyone buys quick food, and maybe Groupon users can shift to buying their bagels. For a slightly formal upscale cafe like Posies, you're trying to capture people's "sit down at an expensive environment" [1] time, which seems like it wouldn't convert as well long term. Groupon users might do it once for the experience, but people generally budget much less time and money for formal relaxing experiences, so you'd have a harder time displacing it.
[1] http://posiescafe.com/wp/?page_id=76 - Their coffee is compares reasonably to Starbucks at $2 to $3 a cup, their sandwiches around $9... they've got wines and beers from $3 to $7 per glass. I think this puts them in a tough spot where they're both upmarket/a slight luxury in most people's eyes, but still don't have crazy profit margins like an ultra-premium place.
My analysis:
I think Groupon is good for businesses that do high volume that want to replace people's regular common routine (a sandwich, hot dog, drink, whatever), low cost businesses that the Groupon demographic would keep using (inexpensive nail salons), and for places with no marginal cost (Chelsea Piers for instance, museums, other places where all the expenses are operating the place and there's no significant space constraints). I think slightly upmarket, not quick places would be one of the worst performers in Groupon if they couldn't at least break even on the Groupons.
I agree that this trivializes the problem. A cupcake shop is as serious of a business to its owner as Groupon is to Andrew. And running out of batter is one of the most serious problems a cupcake shop can experience. If cupcake shops are running out of batter it's a problem that Groupon should be extremely concerned about.
Yeah, this is a classic passive-aggressive reframing move, throwing up dust to obscure what the original problem was. The glowing, 'happy client' email sounds like it was written by a PR drone, and even then it doesn't even try to address the substance of the problem. It drove hits to the website?
The thing that gets me is when he says "If they have a great business, we’re the best amplifier out there." Every small business owner thinks they've got a great business! I'm sure their number one sales tactic is to exploit people's vanity, which may be perfectly legal, but it's a still pretty messed up thing to do.
And then he says "But we used to be all about helping people raise money for charity, we're good guys!" Yeah, but now you're pocketing other people's money, I guess things change.
Comments
I thought this bit was a bit condescending, and starts the response off on a sarcastic note:
I possibly missed a Groupon story or two, but I don't remember any where stores ran out of ingredients - the problem is not so much that they can't satisfy the demand (though there is some of that in some cases) but that it's a cost sink that didn't generate the promised increase in "regular" customers.> I thought this bit was a bit condescending, and starts the response off on a sarcastic note:
I didn't read that as sarcastic or condescending, but maybe it's because I already spent time watching all the Groupon site videos? There vibe is pretty friendly, lighthearted, and helpful - I bet there actually was a cupcake place that ran out as a notable experience, and that's why they write about it.
> he problem is not so much that they can't satisfy the demand (though there is some of that in some cases) but that it's a cost sink that didn't generate the promised increase in "regular" customers.
This is true, yes. I think a business owner should look at their desired customer base - the bagel shop it's a great play, because everyone buys quick food, and maybe Groupon users can shift to buying their bagels. For a slightly formal upscale cafe like Posies, you're trying to capture people's "sit down at an expensive environment" [1] time, which seems like it wouldn't convert as well long term. Groupon users might do it once for the experience, but people generally budget much less time and money for formal relaxing experiences, so you'd have a harder time displacing it.
[1] http://posiescafe.com/wp/?page_id=76 - Their coffee is compares reasonably to Starbucks at $2 to $3 a cup, their sandwiches around $9... they've got wines and beers from $3 to $7 per glass. I think this puts them in a tough spot where they're both upmarket/a slight luxury in most people's eyes, but still don't have crazy profit margins like an ultra-premium place.
My analysis:
I think Groupon is good for businesses that do high volume that want to replace people's regular common routine (a sandwich, hot dog, drink, whatever), low cost businesses that the Groupon demographic would keep using (inexpensive nail salons), and for places with no marginal cost (Chelsea Piers for instance, museums, other places where all the expenses are operating the place and there's no significant space constraints). I think slightly upmarket, not quick places would be one of the worst performers in Groupon if they couldn't at least break even on the Groupons.
I agree that this trivializes the problem. A cupcake shop is as serious of a business to its owner as Groupon is to Andrew. And running out of batter is one of the most serious problems a cupcake shop can experience. If cupcake shops are running out of batter it's a problem that Groupon should be extremely concerned about.
Yeah, this is a classic passive-aggressive reframing move, throwing up dust to obscure what the original problem was. The glowing, 'happy client' email sounds like it was written by a PR drone, and even then it doesn't even try to address the substance of the problem. It drove hits to the website?
The thing that gets me is when he says "If they have a great business, we’re the best amplifier out there." Every small business owner thinks they've got a great business! I'm sure their number one sales tactic is to exploit people's vanity, which may be perfectly legal, but it's a still pretty messed up thing to do.
And then he says "But we used to be all about helping people raise money for charity, we're good guys!" Yeah, but now you're pocketing other people's money, I guess things change.