How to make an unprofitable Groupon campaign successful

"Although I am skeptical the Groupon user base is a highly desirable group of customers, few people have actually made a convincing argument that shows they don’t return in significant numbers."

It's probably better to use that as a starting point: i.e., assume Groupon customers are not the best demographic, and design the Groupon discount accordingly (only a modest discount on a higher-priced good or service, e.g.).

Great post guys. I have used Groupon many times and the places I revisit are the ones that have excellent customer service.

I think an important factor to note is Deal Expiration date. Many businesses only give customers 1-2 months to redeem a certificate, if you span this out across a year you will save yourselves a lot of energy when the Groupon is about to expire.

There has been plenty of commentary and feedback about how businesses view Groupon, but less about users. What is the prototypical Groupon user? A coupon chasing cheapo or someone who is looking to try new places in their city?

Wow - "Groupon consultant" would be a pretty lucrative gig. Be the go between between the small biz and Groupon, negotiate better terms, educate on best practices, etc.