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(Fox News)   Groupon leads to $450 by-appointment-only waffles in DC   (foxnews.com) divider line 32
    More: Unlikely, Groupon  
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1835 clicks; posted to Business » on 25 Jul 2012 at 10:35 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-25 08:42:25 AM
oh awesome, another story about a small business owner that doesn't understand how to properly use marketing tools.

"According to our records, only 132 Groupons, or 18 % sold, have been redeemed since Back Alley ran two months ago," said Groupon spokesperson Julie Mossler in a statement emailed to FoxNews.com. "And Mr. Nelson has received 2/3 of his share of the revenue to date. We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause."


oh wait, no, it's a small business that was already failing and using a marketing tool as a last ditch effort now blaming that marketing tool for its failure. if your business can't absorb 3 free meals a day for 2 months without going under, it probably wasn't going to work out anyway.
 
2012-07-25 09:26:41 AM

thomps: oh awesome, another story about a small business owner that doesn't understand how to properly use marketing tools.

"According to our records, only 132 Groupons, or 18 % sold, have been redeemed since Back Alley ran two months ago," said Groupon spokesperson Julie Mossler in a statement emailed to FoxNews.com. "And Mr. Nelson has received 2/3 of his share of the revenue to date. We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause."


oh wait, no, it's a small business that was already failing and using a marketing tool as a last ditch effort now blaming that marketing tool for its failure. if your business can't absorb 3 free meals a day for 2 months without going under, it probably wasn't going to work out anyway.


This. If you can't afford to give food away for cheap, don't go on Groupon. They knew what they were getting into when they signed up for it.
 
2012-07-25 09:43:01 AM

ArkAngel: thomps: oh awesome, another story about a small business owner that doesn't understand how to properly use marketing tools.

"According to our records, only 132 Groupons, or 18 % sold, have been redeemed since Back Alley ran two months ago," said Groupon spokesperson Julie Mossler in a statement emailed to FoxNews.com. "And Mr. Nelson has received 2/3 of his share of the revenue to date. We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause."


oh wait, no, it's a small business that was already failing and using a marketing tool as a last ditch effort now blaming that marketing tool for its failure. if your business can't absorb 3 free meals a day for 2 months without going under, it probably wasn't going to work out anyway.

This. If you can't afford to give food away for cheap, don't go on Groupon. They knew what they were getting into when they signed up for it.


Double this. I just ran a groupon for a fitness business of mine and it was awesome. They were very professional. Further, they did cap the number of groupons sold. Now, you need some business sense to run a groupon. If it costs you $7.50 to make waffles (including overhead), then don't have a groupon for $4 waffles!
 
2012-07-25 10:08:19 AM
Groupon is a sucker bet for small businesses.

Receiving 25 cents on the dollar for one-time only customers is a recipe for disaster.

Most businesses that advertise on Groupon discount their goods by 1/2 just to get the publicity. Groupon takes half of what comes in leaving the business with less money than it takes to create the product to begin with. I'm surprised entities such as Groupon haven't already died out. But, there are suckers born every minute. The Groupon pitch is that they'll create a huge database of repeat customers which is bullshiat... most customers get the 1/2 off special and will bounce over to the next offer tomorrow) This ins't the way to cultivate return business.
 
2012-07-25 10:16:41 AM

BunkyBrewman: Groupon is a sucker bet for small businesses.

Receiving 25 cents on the dollar for one-time only customers is a recipe for disaster.

Most businesses that advertise on Groupon discount their goods by 1/2 just to get the publicity. Groupon takes half of what comes in leaving the business with less money than it takes to create the product to begin with. I'm surprised entities such as Groupon haven't already died out. But, there are suckers born every minute. The Groupon pitch is that they'll create a huge database of repeat customers which is bullshiat... most customers get the 1/2 off special and will bounce over to the next offer tomorrow) This ins't the way to cultivate return business.


Agreed to a point. The amount of traffic it drives to a business is insane though. My groupon ran for 4 days and I had close to a 2000% increase in traffic driven to my site. How much do you pay for marketing? Quite a bit in some instances. Groupon can be effective for that if nothing else.

Granted, my business is service based with no overhead. If I was selling goods or services that required me to spend money for the groupon, then my earlier point stands.
 
2012-07-25 10:30:24 AM
Meh, GroupOn won't be too far behind them in going out of business.
 
2012-07-25 10:39:53 AM
I think the more important question is --

These waffles were originally $15?

Was this guy running a Marriott?

/DC is expensive, but not THAT expensive
 
2012-07-25 10:42:12 AM

BunkyBrewman: Groupon is a sucker bet for small businesses.

Receiving 25 cents on the dollar for one-time only customers is a recipe for disaster.

Most businesses that advertise on Groupon discount their goods by 1/2 just to get the publicity. Groupon takes half of what comes in leaving the business with less money than it takes to create the product to begin with. I'm surprised entities such as Groupon haven't already died out. But, there are suckers born every minute. The Groupon pitch is that they'll create a huge database of repeat customers which is bullshiat... most customers get the 1/2 off special and will bounce over to the next offer tomorrow) This ins't the way to cultivate return business.


A friend of mine is in the restaurant business and he's pretty much already confirmed everything you said. He refused to do any business with Groupon because people will come in for the bargain and never come back, regardless of how good the food is.

It might be a business model that works well for other businesses, so your mileage may vary.
 
2012-07-25 10:46:58 AM

Dog Welder: A friend of mine is in the restaurant business and he's pretty much already confirmed everything you said. He refused to do any business with Groupon because people will come in for the bargain and never come back, regardless of how good the food is.

It might be a business model that works well for other businesses, so your mileage may vary.


the issue that most businesses don't acknowledge is that even if you've designed a good groupon campaign, you have to make sure that you have some sort of strategy for turning groupon users into regular customers. groupon's job is to get people in your door, your job is to win them over.
 
2012-07-25 11:02:56 AM

thomps: Dog Welder: A friend of mine is in the restaurant business and he's pretty much already confirmed everything you said. He refused to do any business with Groupon because people will come in for the bargain and never come back, regardless of how good the food is.

It might be a business model that works well for other businesses, so your mileage may vary.

the issue that most businesses don't acknowledge is that even if you've designed a good groupon campaign, you have to make sure that you have some sort of strategy for turning groupon users into regular customers. groupon's job is to get people in your door, your job is to win them over.


Which is why they don't work in restaurants. The servers get biatchy with the cheap people, instead of being nice and friendly.
 
2012-07-25 11:10:53 AM

stewbert: thomps: Dog Welder: A friend of mine is in the restaurant business and he's pretty much already confirmed everything you said. He refused to do any business with Groupon because people will come in for the bargain and never come back, regardless of how good the food is.

It might be a business model that works well for other businesses, so your mileage may vary.

the issue that most businesses don't acknowledge is that even if you've designed a good groupon campaign, you have to make sure that you have some sort of strategy for turning groupon users into regular customers. groupon's job is to get people in your door, your job is to win them over.

Which is why they don't work in restaurants. The servers get biatchy with the cheap people, instead of being nice and friendly.


This...to a point. I bought a groupon for a fairly expensive restaurant in Chicago. It was $30 for $60. The GF and I had a great time and our waiter was fantastic. He even gave us a card for two free drinks when we go there next. I think Groupon can work, but not when it offers a specific good or meal, as in TFA's example.
 
2012-07-25 11:21:45 AM

Tax Boy: I think the more important question is --

These waffles were originally $15?

Was this guy running a Marriott?


No, he says he was paying his employees "more than a subsistence wage." Further proof that he doesn't know how to run a restaurant.

The only people dumber than the merchants who use Groupon are Groupon's shareholders. The whole business model is transparently bullshiat.
 
2012-07-25 11:29:26 AM
Do those waffles come with free blowjob?
 
2012-07-25 12:03:13 PM
3.bp.blogspot.com

Shut your yap and get me some waffles!

/$8 waffles better be amazing
//They're $1.95 with a 400% mark-up at Waffle House
 
2012-07-25 12:04:55 PM
If you have a high fixed cost, Groupons make great sense. If it costs you $5 to make a waffle, selling 10k extra waffles at $4 isn't going to help unless you can absorb the $10k loss and those customers start coming back for $15 waffles.
 
2012-07-25 12:07:35 PM
If you're a restaurant that wants to do a Groupon, do a deal for a prix fixe meal.
 
2012-07-25 12:23:29 PM

roc6783: If you have a high fixed cost, Groupons make great sense. If it costs you $5 to make a waffle, selling 10k extra waffles at $4 isn't going to help unless you can absorb the $10k loss and those customers start coming back for $15 waffles.


Or they all buy six dollars in sausage and bacon to go with the waffles. Oh, and some country ham. And a biscuit with sausage gravy.
 
2012-07-25 12:25:27 PM

roc6783: If you have a high fixed cost, Groupons make great sense. If it costs you $5 to make a waffle, selling 10k extra waffles at $4 isn't going to help unless you can absorb the $10k loss and those customers start coming back for $15 waffles.


Ayep.

Groupon = good for yoga studios, bad for restaurants.
 
2012-07-25 01:01:13 PM

wildcardjack: /$8 waffles better be amazing
//They're $1.95 with a 400% mark-up at Waffle House


Practically this.

/submittard
 
2012-07-25 01:06:16 PM
Another article on this was filled with comments from locals. Apparently this place had a crap location that shared a bathroom and used running water from apartments upstairs. They said it appeared dirty.

I can't vouch for the accuracy but it sounded like this place was dead already.
 
2012-07-25 01:38:33 PM
What about the appointment comment? Was it a joke, or is he really hoping some rich person or two has to have his waffles so badly they'll take him up on it? Personally I'm not getting the vibe that his service would be worth $450.
 
2012-07-25 02:03:11 PM
Does that include eating them with John Kerry?
 
2012-07-25 02:08:11 PM
my family owns a couple properties which have restaurants in them . Over the years I've come to the conclusion most people who open restaurants st terrible businessmen
 
2012-07-25 02:08:31 PM
TFHeadline lead me to believe this was a prostitution front.

/leaving disappointed
 
2012-07-25 02:15:38 PM
Doesn't DC have waffle house? No ones going to buy $16 waffles. And $8 isn't such a great "deal" either. Sounds like he had a terrible business model to begin with.
 
2012-07-25 02:16:10 PM
Just make sure your 'waffle' isn't purple.
 
2012-07-25 04:02:44 PM
Dammit, so much for my streak of not clicking fox news links. Why not?

Because of shiat like "Will Small Businesses Deal With Obama's Insults?" in a link on the side.

WTF is that? Like or hate Obama, who thinks that small businesses are going to close up shop out of petulance because Obama hurt their poor widdle feelings? Idiots, that's who.
 
2012-07-25 04:20:22 PM

Lizsavage: Doesn't DC have waffle house? No ones going to buy $16 waffles. And $8 isn't such a great "deal" either. Sounds like he had a terrible business model to begin with.


Actually no, DC doesn't have a Waffle House, you have to go at least 25 miles out of DC to find one.

And yeah it appears that a bad location (they were literally in the alley?!?!?) and bad planning is what put this business under.
 
2012-07-25 09:38:02 PM
Most smart people can look at Groupons for cheap food joints and realize they are bad for the business owner. So then they wonder how Groupon will ever survive and start believing it's all a big con game.

What they ignore is the fact that a large proportion of cheap food joints are run by idiots. Idiots are are veritable cash cows for Groupon and idiots are not leaving the restaurant industry. Idiots think 'hey i like restaurants, i should run one!'. Idiots think they can have a famous chef redesign their dining room and it will solve their inability to run a restaurant.

Restaurants fail at a breakneck pace and involve a tremendous amount of work for most owners. They are a terrible investment. They are more of a suckers' game than Groupon.
 
2012-07-25 11:21:38 PM
Service-based businesses often fail with Groupon, too.

Some housemates and I once bought a Groupon for a house cleaning. We were definitely in the market to build a relationship with one company and stay with them, and were just using the Groupon to try them out. So we were the perfect customers of a not-cheap service.

The owner came with two other cleaners. Now, he and I spoke quite a bit as this cleaning went on, and his integrity and desire to do a good job came through, as did his years of experience. They stayed the exact amount of time they should, and worked hard the entire time.

But as I went through later, I saw mistakes--things moved for cleaning and randomly returned to the wrong room, footprints in a mopped floor, only one of two sets of blinds on a window cleaned. I know they weren't trying to cut corners--what they did was done fabulously.

But they were exhausted. They had an outrageous number of houses to go through each day, and it had been going on for days and days, in the atrocious DC heat. The cleaners were glassy-eyed with tiredness, and making silly mistakes. A few, as any housekeepers might make from time to time, are ok, but tiredness leads to one too many. That makes it hard for a potential customer to trust enough to make the leap to a full-priced housecleaning service.

Any service provider that underestimates Groupon demand to the point where he and his employees are exhausted and making random mistakes...well, it's not as bad as running out of something, or going broke. But it left a bad impression of his judgment, just bad enough that we'll probably try another housekeeping service. WITHOUT a Groupon.
 
2012-07-25 11:40:41 PM
Who's gunna pay $8 for a single waffle when you can go to Dennys and get 2 waffles, eggs, bacon, sausage and coffee for $6.99?
 
2012-07-26 08:23:46 AM

supageil: Service-based businesses often fail with Groupon, too.

Some housemates and I once bought a Groupon for a house cleaning. We were definitely in the market to build a relationship with one company and stay with them, and were just using the Groupon to try them out. So we were the perfect customers of a not-cheap service.

The owner came with two other cleaners. Now, he and I spoke quite a bit as this cleaning went on, and his integrity and desire to do a good job came through, as did his years of experience. They stayed the exact amount of time they should, and worked hard the entire time.

But as I went through later, I saw mistakes--things moved for cleaning and randomly returned to the wrong room, footprints in a mopped floor, only one of two sets of blinds on a window cleaned. I know they weren't trying to cut corners--what they did was done fabulously.

But they were exhausted. They had an outrageous number of houses to go through each day, and it had been going on for days and days, in the atrocious DC heat. The cleaners were glassy-eyed with tiredness, and making silly mistakes. A few, as any housekeepers might make from time to time, are ok, but tiredness leads to one too many. That makes it hard for a potential customer to trust enough to make the leap to a full-priced housecleaning service.

Any service provider that underestimates Groupon demand to the point where he and his employees are exhausted and making random mistakes...well, it's not as bad as running out of something, or going broke. But it left a bad impression of his judgment, just bad enough that we'll probably try another housekeeping service. WITHOUT a Groupon.


Or you could just wait until their groupon runs out, then give them another chance when they are better rested. It's not like you're married to them if you give them a non-groupon chance. And you used the word "fabulously".

On the other hand, I am shorting GRPN, so I hope all end in abject disaster. The whole thing can't die fast enough for me.
 
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