Sadly, it has been my experience that a lot of the businesses that sign up for Groupon don't know what they are getting themselves into and as a result, take out their frustrations on customers when they can't break even for the month... which is, I think, a fatal flaw in the human psychology aspect of the business model. I'd rather just pay the sticker price and enjoy better service than have to deal with all that.
It seems like companies on Groupon, for whatever reason, often offer way more of a discount than they're comfortable with. I wonder why that is.
The money being lost on the Groupon is a sunk cost, so you've got:
Option A: Lose money on the customer, treat them like second class citizens, probably lose the customer forever, possibly have the customer tell all of his or her friends how bad they think the business is.
Option B: Lose money on the customer, still treat them just as well as any other customer or even better and try to convert them into a repeat customer and/or organic spokesperson for your business, recoup the lost groupon money over time through repeat business.
I can't speak for everyone but I know that if I'm an option B customer, I'm going to be an enthusiastic spokesperson for the business. Getting a great deal and good service early on is a good way to convert me to be a customer of yours for life (early impressions really stick with you, sort of the reasoning behind buying the first round of drinks, you probably don't need to buy another drink all night because you're the cool guy who bought the first round).
So all-in-all, I don't think all the blame of having Groupon customers treated badly (if this even exists as a real thing and isn't a perceived occurrence that isn't statistically a real thing) can be placed with Groupon.
I suspect at least part of it is likely just the fact that a lot of businesses have terrible customer service these days (probably due to a number of factors including low wages, races to the bottom on margins, etc) and as a customer you would have been treated pretty poorly anyway but the groupon thing gives you something to latch onto as far as reasoning it out.
To increase your audience, you almost always have to pay.
In contrast to big business, America especially likes to celebrate and idealize the small business owner as the one who truly knows the value of treating the customer right. But if these stories are frequent, it probably just exposes the sad truth that it's not as common, even in small business, as we like to believe or hope.
Even at that age, I was like, "wha? But, isn't that the purpose of a promotion? So someone tries your stuff and might come back?" It wasn't like a coupon in the back of a magazine, but something the car wash guy actively promoted.
The vast majority of people don't/don't realize that's the case, though, which makes huge half-off type deals pretty miserable for wait staff.
Plus the most active users of groupon are probably doing it to save as much money as possible with coupons. They're unlikely to willingly throw away those savings on massive tips... and from what you hear about frequent groupon users they really don't tip the price pre-coupon.
You still save money with a coupon, you're not paying full price for the meal. That's no reason to screw over the server who depends on tips for a living. If someone is seriously strapped for cash and needs to save money, they should be cooking at home, not going to restaurants.
Don't get me wrong, I'd happily do away with the whole tipping culture and just have the entire price printed on the menu. But, as long as we have tips, take the time to learn how to do it right.
I'm personally bothered by the entire tipping culture in the US. Once used to acknowledge that someone has gone above and beyond, now it is just used by businesses as a means to pay below minimum wage (which is too low already). The fact that it is also percentage based this means a person working at a restaurant with higher prices likely makes more money just because I'm charged more for the food. This doesn't seem fair to those workers who are wait staffing at a more affordable restaurant. I can tip above standard percentages at those restaurants, but this isn't going to translate to the whole.
It is also well known that other discriminatory issues factor in to tips (age, gender, race, attractiveness, etc...)
Bottom line, tipping should be thrown out as an expectation and should have zero impact on wait staff wages. Restaurants should be forced to pay at or above minimum wage and menu prices can be adjusted accordingly. As dependent as today's society is on the food service industry, maybe it is about time they unionize and start striking at the local and/or national levels until some laws are changed to treat them fairly.
I think there are a lot of people like me who before groupon, never used a coupon at a sit down restaurant in my adult life, and therefore it was never something I ever had to even think about.
This is really the main point. Similarly, you're free to decide that it's gross to shake hands with the people you meet, but you should be aware that you're acting outside of cultural norms.
The bottom line is that tipping is a custom and an etiquette. These things vary quite a lot from location to location. It's surprising to me that someone would assert that there's really only one proper way to do it in a country as big as this.
Emily Post, for example, says to tip only on the pre-tax amount of the meal plus 1-2$ per drink and nothing at all about coupons.
Edit:
Still doesn't change the fact that Groupon has a rather nasty habit of taking advantage of small businesses and generally screwing them over. But that's a mixed bag also. I use Groupon a lot and find them to be a great source of places with generally well-meaning owners who are a good alternative to large corporate chains and work hard to keep me coming back.
My ex-girlfriend used Groupon to find ways to go cheap and took advantage of it with absolutely no intention of ever going back to see anyone a second time. Her repeat business could not be bought with any exceptional level of service.
Ultimately, it's a business decision the owners have to make for themselves. The problem for Groupon as a company is that their largest appeal is for people who are going to be a bad business decision for the owners using their service. It's a bad model, and it's clearly failing, so that means things are working exactly as they should.
Basically, nothing about tipping makes sense, so you just have to learn the thoroughly arbitrary rules.
The opposite happens, once the event is done, the facilities/stadiums/everything goes unused -- novelty and interest lost.
Same thing happens to these business when they worked with Groupon: make some money (oftentimes they don't even break even) during their promotions/deals, but as soon as it was over hardly any bothered to return.
Sounds like this tension hasn't been managed very well.
It reminds me of Massdrop. You expect to get a deal by purchasing something in "mass" with others but it turns out you are paying at best Amazon retail price but most likely MORE than you would pay buying from Amazon not to mention shipping costs.
Mass drop sells DIY kits to build ergodox keyboards which you typically can't buy anywhere else. Additionally they just arranged a production (with a lot of help from a Redditor) of custom key caps (Triumph GMK Adler https://www.massdrop.com/buy/triumph-adler-gmk-keyset).
Edit: just remembered I looked at buying headphones from Massdrop once. The starting price for the group buy was MSRP and the final unlocked price was the same as on Amazon. This definitely mirrors what others are saying.
Groupon then became a way to drum up business when things were slow while still hopefully making some margin on them by using the cheapest ingredients, smaller portions, offering a less costly (ie. higher margin) experience, etc.
Ended up leaving a bad taste in the customers' mouth almost guaranteeing they wouldn't return.
We were told that dinner would be provided, and given a coupon for the hotel's restaurant. Upon presenting said coupon prior to being seated, we were greeted with a look that I can only describe as 'oh, I see' - promptly seated at the absolutely worst table in the place, and given a 'special menu' with one or two very plain options (think, chicken with vegetables and a plain sauce) in an otherwise very nice-looking restaurant. We were summarily ignored for a very long time before our order was collected, and when the food was served it was sort of plonked down with no ceremony or pleasantries.
It's an awful experience to be treated this way, as a second class customer. As though you've broken a social contract by being allowed in through some hack, and the staff will 'serve' you to the absolute letter of the definition and no further. Almost pointedly so as though to emphasise how unhappy they are with your presence.
I never used groupon for a restaurant, but I can completely see that something like this might happen and understand why you never went back!
For the human psychology of a business owner of say a restaurant that's terribly, as this means every time someone walks in, that's $25 of revenue and say $5 of profit walking in for your business and its employees to extract, but a guy walking in with a voucher is just $20 of costs.
Even if the voucher was bought for $25, that feels like money 'earned' weeks ago, and anyone who actually makes use of the voucher feels like it's costing you $20 even though it'd constitute the same $5 profit as a normal customer.
Combine that with the fact the vouchers in this hypothetical example wouldn't actually be priced $25, but rather discounted to $15 or $19 which has to be shared with Groupon, and the fact those who're use Groupon (discount seekers) not always but on average tip less, really kills the mood for typical Groupon's merchants: struggling business owners who don't sit in an office and look at customers on a purely rational level and see them as just numbers.
So I agree, it's a human psychology flaw in the business model. It's not unsurmountable, if Groupon runs a solid Merchant Centre full of 3 minute videos for merchants on Groupon's research that shows how their service affects the success of a Groupon deal generating repeat business, how instructing your employees to say x y z words when a Groupon member comes in etc, you could go a long way to mitigating this.
Google for example runs a clever incentive structure where the quality/relevancy of the ad plays a role in your ranking vs other merchants, and so the better & more relevant your ad, the less you have to pay for your add to be more visible. This means some merchants who build relevant ads actually pay less to be on the nr 1 spot in the search ad rankings, than companies who pay more but offer shittier ads. And they run a whole merchant centre with tons of videos to explain this whole process and what you can do to improve it. [0] This improves the experience for users by rewarding merchant's quality control, which benefits them, too. Groupon should run something similar which they probably already do in some way but I'm not very familiar.
Another solution is more controversial and hard to sell to merchants, which is to not pay merchants for vouchers that go unused and expire. This way a merchant can't be 'hopeful' that a Groupon user doesn't come in, because he doesn't earn any money when a person buys a voucher and doesn't use it before it expires (like I've had happen myself a few times.) Every groupon user who comes in is one he'd otherwise not get paid for, and so it flips the story around, every time a person comes in he gets paid by redeeming the voucher. Right now he gets paid regardless and people coming in are just costs, so obviously a merchant isn't thrilled to see groupon users come in today.
So I guess in theory someone taking groupon (or barter dollars) should just be a regular business that is doing well wanting to increase business. But in actual cases it might more often (from my experience at least) be a marginal business that is trying to fix a situation with marketing that isn't exactly going to work as planned by bringing in groupon dollars or barter dollars (that will end up being used by the owner to go out to dinner with his wife (and yes that is what happened)). Valuable things (in the case of barter dollars) that a business needs are not typically available with barter dollars. What you get is a bunch of things like dining, travel or accountants or attorneys (and how many of those do you need).
So in other words the restaurant barters meals and gets "trade credits". The other participants barter either the products they are selling "plumbing supplies" or services "lawyer, accountant" and so on. They get trade credits. The barter exchange keeps track of how many credits a business has so they know what they can spend. Typically people who sell services or perishable products are big winners. Losers would be businesses with low margins. For example you wouldn't find any Plasma TV's typically on a barter exchange. You might find jewelry though because that has a big markup. I actually was able (and this was some time ago I have to add) barter an apartment for myself as well as apartments for some of my employees. Other big items are perishable products such as hotel rooms, travel and so on. Magazine or newspaper ad space are other examples.
Use it or lose it to the vendor. There is an active and most likely a separate channel of travel barter that operates independent of any barter exchange. (Billboards for radio time let's say. TV for travel expenses.).
I find saying something like: "I'm confused, because I can find a better price online for this room of $XX.XX" works every time that I've used it. I've never even had to apply the additional pressure of: "It seems unnecessary, but if you can't match that, then I guess I'll have to book online."
In practice whether this actually works is all over the map. Some chains will deny the claim if the cancellation terms are even slightly different, e.g. they'll say the rate on the official site was more expensive but doesn't violate the best-rate guarantee, because it allows cancellation until 6pm, instead of 5pm, which is a better set of terms. This then makes it easy to discount in third-party channels without technically violating the guarantee, by deliberately modifying the terms slightly. Other chains follow closer to the spirit of the "guarantee", but it's a bit of a lottery.
As for why they don't just offer their best rates on the official channel to begin with, without some kind of policing from the franchiser: mostly, it's market segmentation based on price sensitivity. People booking at an aggregator are more likely to have no real brand loyalty and be sorting by price, so hotel owners want to discount their rates to show up competitively in the comparison. But people booking through hyatt.com or holidayinn.com are more likely to have brand loyalty, possibly be accumulating points/status on the company dime, possibly are already committed to a specific hotel, etc. The hotel in this channel isn't competing as directly with side-by-side search results from other brands, so doesn't want to unnecessarily discount. It's in the brand's long-term interest if the official channel becomes known as having the best rates, but each individual hotel may sometimes benefit from charging more through the official channel and discounting elsewhere, hence this back-and-forth between the franchise owners and the brand management.
Best Buy is guilty of this too. Not their worst offense, but a lot of things that are harsh on price match, like hard drives, often have their own retailer-specific model number. The same drive might be identical, but the one on Amazon has a different model number to BBY to thwart price matching.
Part of this was on the hotel though, for not managing their rates through the aggregator properly. Often hotel management would call up angry about the rate they received, but they could barely use a computer, much less manage using multiple aggregator's backend websites.
The hospitality industry is kind of a mess.
That just doesn't happen. People show up for one quick, cheap engagement, and then they're gone. Once front-line sales people realize this, the desire to welcome Groupon customers evaporates.
There are two culprits in this. One is the Groupon field sales force, for over-promising the business value of getting a flurry of cheap visitors. The other is the target company's senior management, for agreeing to a dumb deal and not working better with the front-line sales/service folks to make a better go of things.
Most, but not all, Groupon deals have fine print prohibiting this by stipulating that the Groupon be disclosed on arrival or while making a reservation. I disregard this because I would much rather give the restaurant the opportunity to not honor the discount (I will pay in full including tip, and use the Groupon properly on a return visit) in exchange for uncompromised service.
I have never had restaurant staff so much as hint any sort of disapproval when I slip them the Groupon late, let alone reject it. Not even close. I think it's because they get it - it makes sense to do this.
(The above applies only to full-menu fixed-discount deals such as "$50 to spend on food and drinks". Obviously I cannot and do not use this method when the deal involves anything along the lines of a prix fixe menu, because in those cases one must be treated differently upon arrival.)
I tip based on the pre-discounted bill and generally the service is great enough (thanks to this technique) to hit the 18-20% mark. If I disclosed the Groupon earlier and received subpar service as a result, I'd give an appropriately low tip.
There was always a large minority of Groupon users trying to get the rules bent/broken in their favor--so for example, the Groupon they purchased might say "Only useable Monday-Thursday, does not stack with any other Groupon, coupon, promotion, or discount" and then they'd come in on a Saturday and try to use their Groupon with another discount. When we'd explain why that wasn't possible, they'd complain, hold up service for other customers, and/or write negative online reviews. This happened pretty consistently over the course of 2 years and 3 different Groupon deals we had.
However, we were not a restaurant--we sold pre-packaged gourmet sweets--and so none of our employees depended on tips to get paid. We also had high profit margin on our goods, so we still made a good amount of profit with the discounted Groupon prices. Additionally, despite the above-described behavior happening consistently, we had even more Groupon users discover the place for the first time, and then become returning and loyal customers.
So Groupon worked out for us, but I think it's because we had a pretty unique situation.
I'd compare it to how hotels will sometimes give you the worst rooms if you booked through an online site that gets heavily discounted inventory.
How much of that is because the business owner made no attempt to establish a direct relationship with the customer while they were present? If you use a groupon to get me in your restaurant, great. But even better if you do some "permission marketing" and get me to add my name to your newsletter list, or "like" your Facebook page, or something that lets you keep in contact with me.
It's amazing how few restaurants and hotels and what-not seem to even try to do this kind of customer relationship / one-to-one marketing stuff, in 2015. I get regular emails from Petterino's in Chicago, letting me know about specials on Mother's Day, Father's Day, etc., or other special events. I don't live in Chicago so I don't visit their restaurant very often, but they keep themselves on my mind, and you can bet that next time I'm in Chicago, I'm more predisposed to visit them than most of the other restaurants I vaguely remember from my last time there. OK, to be fair, it helps that the product is really good as well. Their "Midwest Corn Chowder" is to die for. But still, it boggles the mind that none of the other places even seem to try.
There's something to be said for the type of audience you cater to. (TL;DR Market to those who know what the idea of "value" is compared to "cheap".)
Do many people leave 2½% (essentially no) tip in London?
It doesn't mean everyone using groupon is automatically a jerk, but it definitely selects in that direction.
Yeah, because absolutes like this help. Groupon customers can be just like any other customer out there. Some "regular" customers will get cheap wine, some will get an expensive bottle. Similarly, some Groupon customers will get the cheapest wine, others will take the money they saved by getting a Groupon and get the expensive wine. Being a "Groupon customer" might move the needle towards one direction but it's far from absolute the way you're making it out to be.
Having said that, I also went for a great Groupon meal somewhere else, which included a cocktail that was so good I had another 2, bought more food on top and ended up paying as much as a 'regular' meal would have been elsewhere (and tipped accordingly for the good service). That was the exception to the rule, though, even based on a very small sample size.
I think that's just a misunderstanding on the stores part. A groupon is just another form of advertising (which costs money) - but businesses believe that by offering groupons they will come out ahead.
I've personally gone to places I wouldn't have normally because of groupon and usually spent extra.
But I suspect it's a correct understanding on the part of the employees. When I talked with servers at restaurants, their experience was that the average Groupon customer was demanding, cheap, and a bad tipper. And they were also unlikely to come back, meaning there wasn't a lot of incentive to invest in a relationship.
And most Grouponers are bottom-feeders. Just looking for a deal. They're also the most likely to be vocal on Yelp (there was a study somewhere showing how Grouponers/Living Social people were more likely to leave bad reviews).
Groupon's salespeople are so high-pressure and portray an overly optimistic view of what a struggling small business should expect.
Speaking from personal interactions from several business owners who have tried daily deals here. Sure, a business needs to calculate it's ROI, but I think Groupon 1) oversells the value of 'getting their name out there' through their deals and 2) doesn't explain how bad their customers are.
I've also had Groupon redeem me for stuff that I had no right to in the TOS but was morally sensible to do.
There are quite a few things I criticise Groupon for but they've always been pretty transparent about their deals and willing to right any wrongs in my personal experience.
If you're not familiar with that, not sure how you could know the blade was old. How often and by what method do you shave/get a straight razor shave? Both of those could affect the quality of the shave more than the age of the blade.
http://theshaveden.com/forums/threads/shavettes-the-truth-ab...