said 1 year, 4 months ago:
@roryramsden Hello Rory,
While I am in absolute agreement with @russellallert on this one, I think we have to separate the debate somewhat. For businesses and brands, he’s 100% right: coupons and flash sales sites are a quick fix, with lasting effects that are mostly on the negative side, even leading some to bankrupcy. Not to mention how it affects the branding, whereby discounting your product or service makes it very difficult to justify ever paying the full price, for new customers just like loyal ones (who get frustrated to see they paid too much to begin with…)
But, and there is a but, as consumers, we win every time. I mean, what’s there not to love about paying 50% or less of the value for a product or service that you may want, or have been thinking about for a while?
Where I tend to disagree somewhat with Russell is when he says these sites are going to fade away. I don’t think so. What I believe is that brands and marketers will get more savvy with the offers, as I have already noticed. More and more, it will be a matter of blending services, in order for the package pricing to be opaque. An example: instead of just offering a hotel night, taking the published rate of 199$ and making it 99$, blend in with soft goods that have low real cost, but high perceived value. So that same hotel night, including breakfast for two, a gift basket upon checking in, and a cocktail for two at the bar, can be said to be “worth” 299$, so you’ll sell it at 149$. That extra 50$ in revenue (well, actually, 25$ for the hotel partner)
So, given this assumption, a USP for such a sales site could read as:
“Exclusive and value-added packages, at incredible prices”
Finally, I think there are two ways coupons sites could thrive:
1) By not being so greedy with partners. Groupon takes 50% from all prices, so there is almost nothing left for the partner. If a site were to come in aggressively and build on a 15-25% commission basis, don’t know if the business model would be sustainable, but small businesses would be all over it
2) Find a niche. Groupon is a generalist, like LivingSocial and others. If a coupon site came around and was specific to just one industry, i.e. travel, or spa, or… then I think it would hold a better chance to differentiate itself. Right now, they all seem to offer the same stuff, so indeed some of them will fade away before we know it.