Groupon – A bubble or a genius concept?

It’s hard to argue that that it isn’t working at the moment. Groupons concept of offering coupons to end users from various companies is simple enough. The question is if it’s worth it. Through Groupons concept the companies has to offer their product/service at 50-70% reduced price, and Groupon takes half of the rest in commission.

It seams like at lest Google think its a good idea after trying to buy the 2 year old company for close to $6 Billion.

There have been stories in Norwegian Newspapers about companies, like a Hairdresser, that got 1 600 new customer in 24 hours. They sold a treatment worth NOK 1 300,- ($220) for NOK 390,- ($67).

They made NOK 200 ($34). And with 1 600 new customers the total is NOK 320 000,- ($55 000).

This is the same as a couple of full page ads in the biggest regional newspapers in Norway and with a price cut like the one above you are bound to get some response.

Wouldn’t that be a better way to build your brand name, than the deal of the day through Groupon? Since most of these offers is local (or regional) you probably could make a small marketing campaign for an amount like that, and you would have total control of how your brand name was presented.

I’m not saying it IS a bad idea, just that you really should checkout other options to be sure that you really get the best solutions for your product.



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