The other day, I came across this video of a small business owner who used Groupon to expose her business. In short, Groupon ripped her off, there were multiple instances of fraud, the deal happened late, her business rankings sank, she was unable to pay her employees, and she lost $10,000. The owner has since written a very popular article on her experience.
If Groupon is a beacon for new age, “no-cost” marketing techniques, why did this happen to her?
- Volume skyrocketed: The business was unable to cope with huge lines of demanding customers, and employees, rankings, and loyalty all suffered.
- The small business was ill prepared: with no computer, few employees, and little training (Groupon only sent her a short video), it was hard for the business to catch its breath.
- The deal went too far: Groupon, in an attempt to make as much money as it could, spread the business owner too thin by making a profitable deal for her unachievable.
However, Groupon doesn’t always destroy business (see next post). But, if a business is too small, ill prepared, and susceptible to “slimy” profiteering techniques, it should consider if this “no cost” marketing technique really costs nothing at all.