According to study of 150 businesses by Rice University’s Jones School of Business, of a coupon promotion by Groupon, those coupon campaigns were unprofitable for 32% of the businesses that ran them. And more than 40% of the response group said they would not run another social coupon promotion again.
Those survey respondents who said the campaigns had not been profitable for them reported that only about 25% of redeemers spent more than the face value of the coupon. They also said that about 13% of those coupon holders came back a second time to shop at full price.
The 1950’s idea of validating use of coupons to gaining customers should stop. Online coupons are frequently found in mom & pop businesses who have no real way to ascertain how well it works other than anecdotal information. People who buy something at 80% off are not going to go back and pay full price when they know another vendor will appear in their mailbox in a few days whether that is a spa or asian restaurant. It has nothing to do with their business model or offering.
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