By
Bob Phibbs
[This is an excerpt from my new book, Groupon: Why Deep Discounts are Bad for Business]
Why are Groupons and the other online sites so dangerous?
Customer satisfaction is going down.
Shopper satisfaction at retail stores is declining upwards of 15 percent a year, based on ongoing research by Interpublic Group. Customers complain they can’t get good customer service. Gift, furniture and other local stores have closed at record rates by some accounts; just like the big-boxes.
Yet deals/coupons/discount sites have become their own cottage industry. Articles and blogs churn out ways consumers should haggle over everything and “never pay retail again.”
Retailers are seen as the evildoers, ones taking “unfair advantage” of the consumer. They’re raking in all the money with their high prices on the backs of their poor customers.
Nothing could be further from the truth. (See Part 1 of this series on discounting.)
The Need to Feel Smart
In a depersonalized world where many are anxious about their jobs, their finances and their relationships, shoppers who use coupons are, by extension made to feel smart. "See how much money I saved," is a way to say "I'm no fool."
I was reminded of this in the New York Times article Wise for Some Restaurants, Coupons Are a Drain at Others from April 13, 2011. "Diners hardly seem conflicted. “When you’re trying to save money, a discount doesn't hurt,” said Lauren E. LaRusso, 25, a graduate student in education at the University of Pennsylvania. “I assume that most of the other people at the restaurant don’t have coupons, and I feel good, that I’m a little smarter than them.”
So is it a class thing? I got something you didn't.
Is it a sneer at the restaurant for them "getting away with something?"
It's used to bolster their self esteem.
Tomorrow: Part 10: No Magic Bullet
- Part 1: Groupon Review: Worst Marketing For Your Businesss
- Part 2: Groupon Business Review Horny For The Deal
- Part 3: Alien Danger Using Groupon For Business
- Part 4: The Perfect Storm
- Part 5: Training Customers to Wait
- Part 6: Fallacy of Converting Coupon Users to Profitable Customers
- Part 7: Local Businesses Need For Immediate Results
- Part 8: The Groupon "getting the word out" Fallacy
- Part 9: Shoppers Need to Feel Smart
- Part 10: Groupon For Business - No Magic Bullet
- Part 11: Groupon For Small Business: No Deal - The Final Review
Bob Phibbs, the Retail Doctor®, has helped hundreds of small and medium-sized businesses in every major industry, including hospitality, manufacturing, service, restaurant and retail. He is a nationally recognized expert on retail business strategy, customer service, sales, and marketing. With over thirty years experience beginning in the trenches of retail and extending to senior management positions, he has been a corporate officer, franchisor and entrepreneur.
Learn how to improve your business with The Retail Doctor's Guide to Growing Your Business.
