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How to screw up a Groupon

Research shows that companies that do a Groupon often get worse reviews after the offer. My theory is that most small businesses aren’t prepared to provide a word-of-mouth-worthy experience for a flood of new customers (and they often blame Groupon unfairly).

If you’re going to do a daily deal coupon, remember that the purpose is to bring in brand new customers. The best thing you can do when you see someone walk in the door with a Groupon is wow them with an extraordinary experience, so you know they will come back. You’re going to lose money on that first deal, but you’re doing it to get a profitable customer for life.

Unfortunately, so many small businesses resent all of these people showing up with cheapo discounts. They’re frustrated that they’re money losers. They end up giving them bad service and skimp on the experience.

We know a nail salon that sold hundreds of coupons but didn’t hire more staff to serve the now-angry buyers who can’t get an appointment. We know a restaurant that seats Groupon customers in the back, ignores them, and doesn’t give them bread.

What happens? The opposite of what the goal was — instead of impressing them, they guarantee that all of those brand new customers leave with a cruddy experience. And they’ll write a lot of bad reviews.

And guess what? People are much more likely to write a review the first time they visit a business than when they are a loyal customer. Which means you just invited a ton of people in hoping they will be future customers and instead left them grouchy and disappointed. And they’re telling their friends.

So lessons learned:

  • Don’t offer a big discount if you’re going to regret it later.
  • Don’t invite people into your business and treat them badly.
  • Remember that every new customer is an opportunity to blow their minds with awesomeness.
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