Groupon

Groupon is the middle man between a seller and a customer. It promotes deals from the seller to its users through online avenues (websites, mobile apps). Groupon promises so many customers to the seller in a given day and if it makes that number it takes a portion of the revenue made that day using the deals. Groupon needs to sell itself to both the user and the seller; it wants repeat customers on both ends. Between 2013 and 2014 Groupon had a 19.9% revenue growth rate in North America. In 2012 Groupon had to redo their statement of financials and it lowered their net income by $22.6 million for the year of 2011.

Groupon being the middle man between sellers and users and has to focus on two fronts to stay profitable. It needs to be able to attract businesses to offer up discounts for a set amount of time, and has to have the deals that users will want to use on a daily basis. So when looking at repeat customers one needs to look at both the seller and the user. Groupon doesn’t release or track usage or repeat buying at businesses or its coupons. A study was done by Utpal Dholakia, a professor at Rice University and found “80% of coupon users are first-timers, and only 20% of them become repeat customers of businesses”. Groupon has released statements that it will be releasing new deals with bigger discounts for repeat customers to try and entice more companies to still sell discounts through them. Businesses that use Groupon in a study found “60% of businesses considered their Groupon experience a success, but more than half of customers do NOT want to run another Groupon” (Goldman & Yarow, 2011). Another study done by Blake Harper, at Wunderlich Securities, found that “78% of respondents who recently purchased a Groupon intended to purchase another one within three months” (2015). The survey was done with only 307 Groupon users, so the actual numbers may be smaller or bigger on a grand scale. I believe the numbers of repeat users are probably...