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Comment by AlexMuir | Hacker News Reader

A customer who takes a common deal on Groupon is highly unlikely to go back to a business. At least here in the UK, Groupon's deals are all the same - restaurants, teeth whitening, facials (it just doesn't seem right typing that) and haircuts.

I can guarantee that there's going to be a teeth whitening deal every week - so why would I ever go back to a dentist and pay full price? Long term, these businesses are damaging their markets and industries. You'll struggle to build a business from fickle, deal-hunting customers.

That said, with things that are unusual I think Groupon is a good solution - a canoe trip, or climbing wall for example. There's less competition and it's a great way for people to try something that they might grow to love. But restaurants - come on!

It's like the reverse of a loyalty card - come again and we'll charge you double.

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The benefit I can see to restaurants comes with people's preference for familiarity.

True, it'll be a tough blow to serve all that food for cheap, but if you can make people feel good about your restaurant for cheap, I think there is a good chance they'll be back, even if they have to pay more.

It's the reason why national brands can charge such a premium over generic stuff, even when it's exactly the same thing. People are risk averse and a Groupon takes half the risk out of a meal purchase.

Groupon is crack for struggling business owners. It's a minimal up-front cost for a massive rush. But then the rush disappears and you're left needing another one. It's a few months later that you realise you're more fucked than you were.

A friend of mine runs a climbing gym that has used Groupon several times. He said it is indeed a double-edged sword: it's tough to swallow the cost, but at the same time, the sheer number of customers the Groupons generated helped pay for building improvements, and increased the gym's membership base (albeit not as much as he hoped).

I agree - the groupon price is likely going to become the "reference price" in the minds of most customers, meaning psychologically any number higher than the "reference price" will be considered too expensive. This effect is even more likely to occur on someone purchasing a service or activity for the first time (first impression effect), not to mention groupon buyers are mostly regular deal-hunters.

I disagree, if someone likes a restaurant then they're likely to come back even if they can get a cheaper meal elsewhere, price isn't the primary factor most people use in choosing a restaurant.

Partly - but people who like trying new restaurants are going to keep trying new ones. Not stop because they found somewhere they like. They might like the next place even more - and at half the price I'm sure they will.

"Not stop because they found somewhere they like"

I bet the average person would go back and/or recommend the restaurant to friends if they had a good experience though.

This article would seem to indicate that that's not really the case.

According to the article, less than 32% of the customers visited once.

"The 32% that said they didn’t make a profit from the program reported that customers rarely bought more than the coupon deal and few returned to the business at a later date."

If over 68% of the customers returned, then I'd call that a huge success.

No, That quote is about the businesses, not the customers.

Customers from 32% of the businesses did not return. 32% of the businesses said customers did not return. Hmmm... seems like the same thing to me.

As someone else noted the sample is very small, likely to only cover a dozen restaurants, so were talking about 6-7 places that wouldn't use it again. Also if you look at the comments made by the restaurants a lot were complaining about fraud (people photocopying groupons) and low tipping rather than lack of repeat customers (although there are a few along those lines as well).

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