Ok, I know its a rip off for the unfortunate business that use them but has anyone used City Deals as a customer.
Todays offer is for Newforest Golf with an offer that is hard to bate, a four course meal for two, a round of golf for two, golf trolleys, driving range balls for €60. That means they would be paying you to eat the four course meal, apart from the golf?
Why is it a rip off. They are trying to drum up business by offering deals and hoping for repeat custom.
If they didnt think it would benefit them they wouldnt do it.
Sorry, I did not explain well. What I meant is that it is not a rip off of the punter that takes up the offer, you or me. It is great value but in the end the one that gets ripped off is the company offering the service.
Quote from: hardstation on June 29, 2011, 08:56:41 AM
They are hardly being ripped off. They get 60 euro for the meal and give you two free rounds of golf (which costs them fcuk all).
Therefore they have just got you to spend 60 euro which you otherwise wouldn't have.
Don't go into the golf and hotel industry or you won't last long HS. Can you tell me how a four course meal for two people costs fcuk all? I would love to know how it gets prepped, how the delivery orders are placed, how the chefs cook it, how it is served, how many people are involved in the process? How much per hour? And then you come along and say it costs fcuk all? The greens on the golf course look after themselves as well and there are no other employees.
Why are they being ripped off though? Its advertising and trying to build a customer base by offering an incentive.
Why would they even do it if they felt it wasnt worth it?
Bud I used them recently, two tickets to the dogs Harold's Cross or Shelbourne Pk, bottle of beer, race card and gourmet burger, for 20 euro. I saw the deal and went Jesus I haven't been to the dogs in ages and in the end six of us are now going. IGB are quids in as they have got the takings from 6 punters who didn't intend to go, I get a good deal on the price. Everyones a winner!
CitiDeal takes 50% or close to it for the trouble of running the deal.
The buyers get a good deal. No doubt. There were seven buyers of the golf offer this morning, I will look later and see how many buy it. I am not saying I ma right but I think (without Googling "Groupon Scam) that you won't see the same companies offering deals on a repeat basis once they have found out the should have read the small print first.
As an example, you can go to Newforest Golf Website and book a round of golf for €20.
The Industry Standard in Restaurant/Hotel catering is around 30%/ - 30% - 40% on Food Cost, Labour Cost and Profit. So, for two peoiple stuck into a four course meal they are going to get €24, or €12 per skull and then out of that provide two rounds of golf! Then take Groupons percentage out of that?
Much the same applies when, in one case a mechanic offered a reduced cost car service and about 200 cars arrived at his door.
When you click that little "Purchase" button your money does not go to Newforest Golf, it goes to Groupon. They already charge Newforest in advance for a minimum amount of "unit purchases" which in some cases is up to 400. They charge an upfront fee. Then, after they have collected all the money and we have all whacked our golf balls around the course driving divots into neighbouring Meath, they pay them back by way of - No Payment for 30 days, 50% after thirty days and the remainder after a further 30 days.
Like I say, I am only posing the question, why in the name of Jaysus would anyone want to eliminate their cash flow when they could get money straight into their tills on the day if they advertised properly. In addition to all that if I was a regular member or visitor to say the Meath Flying Club that they have advertised and I had paid €399 and then I come in and see you with your legs stuck under the table ateing a four course meal and six months membership I would be pissed off so restaurants and hotels could lose money and customers for what they gain at a huge price.
I suppose it's a form of advertising in itself Bud, and is acting as a loss leader. If this sort of advertising gets you 50 purchases, and that costs them 3 or 4 k, but they end up with 30 repeat businesses, plus their friends, you would comfortably make a profit.
the problem i would have with this type of deal, from a retailers perspective, is that the price charge will automatically become the benchmark that establishment is compared against. Yes that was great value for a round of golf and a meal, but at twice the price, no way man.
I suppose what i am trying to say is now rather than competing against your rivals pricing structure you will be competing against your own, and one which in all likelihood didn't make you any money.
Holland and Barrett are a prime example of a company competing with there own pricing, they run in three cycles, full price, they then do buy one get one half price, then everything half price, pretty sure most who use the store wait the 2/3 weeks until the deal is on, but at least the half price is evidently profitable hence the repeat the fact there no repeat offer would suggest to me this type of deal doesn't work for the retailer
245 deals bought with 3 hours to go.
They sold (at real value of €169) over 40,000, almost 50,000 euro of product for 14,700 of which they get back 7,350!!! - 3,500 30 days later and the other half in a further 30 days. You would want to be completely out of your fooooking mind.
Is this simply www.citydeals.com? Can't connect to website!
www.citydeal.ie
Bud, every business has fixed and variable costs, in these days anything that covers it's own variable cost is a winner.
Company's making these offers do their own sums and if the numbers make sense they run with the offer. As someone else pointed out, if the product is worth coming back for, it's good advertising.
These types of consumer driven deal companies have been the rage over here now for a year or so. Groupon, living social etc...
Personally I think they are a great idea - and it makes you wonder exactly what things cost when money was no object and people were firing money hand over fist for 80-100$ rounds of golf. I got one similar to Bud's example last month - golf and range balls for two at a private country club for 80$. I played the same club 3 years ago and it was 110$ for my round of golf - and that was with a member. These places are crying out for business - and I feel little or no worry for them there is no gun to their head to join up for these deals (and if there is any shred of one, it is sometimes their own making for the exorbitant prices they have charged the ordinary punter in "normal times").
I bought a watch from a company called world of watches for a friend as a gift the other day - 1000$ watch and I paid 130$ for it - it makes you wonder how much things are actually worth in the grand scheme of things.
Quote from: Bogball XV on June 29, 2011, 11:06:59 PM
Bud, every business has fixed and variable costs, in these days anything that covers it's own variable cost is a winner.
Company's making these offers do their own sums and if the numbers make sense they run with the offer. As someone else pointed out, if the product is worth coming back for, it's good advertising.
Have to agree, these deals are anything but unfair on the companies. There is no better way for a business to try and build relationships with potential customers than to provide a good quality product/service.
As you pointed out Bud the company could just advertise normally, but this does not guarantee a foot flow of customers through the business, which is vital above all things. No customers=No business. If it means that a business may not incur as high a profit as usual/or just break even in order to gain multiple customers, well surely it is bound to be worth it.
It also allows businesses to keep their general prices steady if they offer these deals/vouchers. For example say a golf club was having difficulties and reduced it's costs, if things did pick up and they increased their price again as demand increased it can be detrimental to the image and goodwill of a business and damage rapport with long-term customers.
And another advantage for the companies, these normally have expiry dates - how many of us have made purchases that we've never gotten around to using?
I would have, but the company actually agreed to extend the date when I called more in hope than expectation - still, it's one way to earn a customer's respect.
Quote from: Bogball XV on June 29, 2011, 11:56:36 PM
And another advantage for the companies, these normally have expiry dates - how many of us have made purchases that we've never gotten around to using?
I would have, but the company actually agreed to extend the date when I called more in hope than expectation - still, it's one way to earn a customer's respect.
Good point. I had a voucher for four ball at K-Club and some dinner one year that I was given as a present from a rather well-off Uncle. The thing ran over by about 9 days before I realised. I rang up and the bastards said there was nothing they could do, I vowed never to step foot in the place. Then, I got onto a senior employee and ranted for a while, give him a wee story of a family death (bad I know but come on, it was worth about €500). Needless to say the man that the night before vented he would never step foot in the complex, was walking out of it the following Tuesday with his K-Club t-shirt on and after shooting one of the best rounds of his life.
But main point I am trying to make is, which Bogball made, when a business goes beyond a customer's expectations (or in my case unexpectedly met them) it can lead to a better customer-employee relationship, which ultimately is of benefit to the business.
Quote from: attheraces on June 30, 2011, 12:12:02 AM
Quote from: Bogball XV on June 29, 2011, 11:56:36 PM
And another advantage for the companies, these normally have expiry dates - how many of us have made purchases that we've never gotten around to using?
I would have, but the company actually agreed to extend the date when I called more in hope than expectation - still, it's one way to earn a customer's respect.
Good point. I had a voucher for four ball at K-Club and some dinner one year that I was given as a present from a rather well-off Uncle. The thing ran over by about 9 days before I realised. I rang up and the b**tards said there was nothing they could do, I vowed never to step foot in the place. Then, I got onto a senior employee and ranted for a while, give him a wee story of a family death (bad I know but come on, it was worth about €500). Needless to say the man that the night before vented he would never step foot in the complex, was walking out of it the following Tuesday with his K-Club t-shirt on and after shooting one of the best rounds of his life.
But main point I am trying to make is, which Bogball made, when a business goes beyond a customer's expectations (or in my case unexpectedly met them) it can lead to a better customer-employee relationship, which ultimately is of benefit to the business.
Did ye read what I posted at all? The customer/business pays Groupon for the vouchers up front, they dont get a refund. Groupon take the consumers payments and keep the money for thrity days and then and only then do they pay the business 50% of the voucher cost and a further payment in another 30 days, some payments taking up to 90 days. If you dont feel hungry and dont use the voucher it is of no benefit to the hotel. There was an article in the Sunday Business Post or one of the papers last week or thereabouts and I will try and dig it out.
Quote from: Bud Wiser on June 30, 2011, 05:15:29 AM
Quote from: attheraces on June 30, 2011, 12:12:02 AM
Quote from: Bogball XV on June 29, 2011, 11:56:36 PM
And another advantage for the companies, these normally have expiry dates - how many of us have made purchases that we've never gotten around to using?
I would have, but the company actually agreed to extend the date when I called more in hope than expectation - still, it's one way to earn a customer's respect.
Good point. I had a voucher for four ball at K-Club and some dinner one year that I was given as a present from a rather well-off Uncle. The thing ran over by about 9 days before I realised. I rang up and the b**tards said there was nothing they could do, I vowed never to step foot in the place. Then, I got onto a senior employee and ranted for a while, give him a wee story of a family death (bad I know but come on, it was worth about €500). Needless to say the man that the night before vented he would never step foot in the complex, was walking out of it the following Tuesday with his K-Club t-shirt on and after shooting one of the best rounds of his life.
But main point I am trying to make is, which Bogball made, when a business goes beyond a customer's expectations (or in my case unexpectedly met them) it can lead to a better customer-employee relationship, which ultimately is of benefit to the business.
Did ye read what I posted at all? The customer/business pays Groupon for the vouchers up front, they dont get a refund. Groupon take the consumers payments and keep the money for thrity days and then and only then do they pay the business 50% of the voucher cost and a further payment in another 30 days, some payments taking up to 90 days. If you dont feel hungry and dont use the voucher it is of no benefit to the hotel. There was an article in the Sunday Business Post or one of the papers last week or thereabouts and I will try and dig it out.
livingsocial.ie is another very similar one.
I know for a fact that the retailer gets the same percentage of the fee, whether the customer actually turns up or not. I'd be surprised if Groupon were different in that regard. Certainly one of the selling points livingsocial use to retailers is that a good percentage of people who buy will not use the voucher by the due date.
Didn't the Purty Kitchen in Dun Laoghaire close as a result of a huge amount of takers for one of these deals and it actually cost them money?
Vendors can also try and upsell. Alcohol being the obvious one here.
Groupon in the us claims that for restauraunts "the average check size is 60% greater than the Groupon's value" - so in reality thats probably a generous figure, but certainly when ive used them there has been drink bought, and sometimes service charge.
Quote from: Bud Wiser on June 29, 2011, 08:42:22 PM
245 deals bought with 3 hours to go.
They sold (at real value of €169) over 40,000, almost 50,000 euro of product for 14,700 of which they get back 7,350!!! - 3,500 30 days later and the other half in a further 30 days. You would want to be completely out of your fooooking mind.
These discounts can be taken very simplisticly either side of the argument - its 14,700 they wouldn't have had or its actual price lost.
My view is that its advertising by the golf course at a relatively low price. Its true the actual golf costs them nothing - on any day the course has to be maintained if 0 people play or 200 people play, the exact same greenkeeping staff are used. So the actual golf doesn't cost them anything.
If the club used its own website or PR, it wouldn't reach the large target market that this discount website has - people will log in specifically to it to see what deals can be got for golf. If they wanted to reach the same market in advertising they would incur at least the cost which the host website is retaining.
The food is their only actual cost and I'd say they are just breaking even on this or a small profit. 4 course with soup, apple pie (desert as an example) and tea/coffee will have a very low base cost. I'm sure they will put on a good spread as it wantspeople to enjoy the day, talk about the food and return.
They may look to make a few quid on buggy hire, drinks and shop sales. But basically they will have got the course full and will look to attract people back for their society others or open competitions. I'm sure they will advertising other speicals on the day which will give them a better return.
On reflection they have filled the course for a day and feed people at no cost to themselves - free advertising and the punter is happy. They won't tun this deal on a regular basis but if 50% of the punters come back in the next 12 months then its been a success.
Quote from: Bud Wiser on June 30, 2011, 05:15:29 AMDid ye read what I posted at all? The customer/business pays Groupon for the vouchers up front, they dont get a refund. Groupon take the consumers payments and keep the money for thrity days and then and only then do they pay the business 50% of the voucher cost and a further payment in another 30 days, some payments taking up to 90 days. If you dont feel hungry and dont use the voucher it is of no benefit to the hotel. There was an article in the Sunday Business Post or one of the papers last week or thereabouts and I will try and dig it out.
I still don't understand the problem Bud, other than a slight delay in getting the cash in - which may be irrelevant as the the customer may not have used the voucher by the time that Groupon pay on the money anyway, I don't see the drawbacks.
I used one for a physio recently and she was delighted with the campaign, she wanted to run another but was advised by citydeals to try and keep at least 6 months between campaigns.
I don't get the highlighted point at all, are you saying that groupon don't send on the money if the customer doesn't use the voucher before expiry?
Quote from: Bud Wiser on June 30, 2011, 05:15:29 AM
Quote from: attheraces on June 30, 2011, 12:12:02 AM
Quote from: Bogball XV on June 29, 2011, 11:56:36 PM
And another advantage for the companies, these normally have expiry dates - how many of us have made purchases that we've never gotten around to using?
I would have, but the company actually agreed to extend the date when I called more in hope than expectation - still, it's one way to earn a customer's respect.
Good point. I had a voucher for four ball at K-Club and some dinner one year that I was given as a present from a rather well-off Uncle. The thing ran over by about 9 days before I realised. I rang up and the b**tards said there was nothing they could do, I vowed never to step foot in the place. Then, I got onto a senior employee and ranted for a while, give him a wee story of a family death (bad I know but come on, it was worth about €500). Needless to say the man that the night before vented he would never step foot in the complex, was walking out of it the following Tuesday with his K-Club t-shirt on and after shooting one of the best rounds of his life.
But main point I am trying to make is, which Bogball made, when a business goes beyond a customer's expectations (or in my case unexpectedly met them) it can lead to a better customer-employee relationship, which ultimately is of benefit to the business.
Did ye read what I posted at all? The customer/business pays Groupon for the vouchers up front, they dont get a refund. Groupon take the consumers payments and keep the money for thrity days and then and only then do they pay the business 50% of the voucher cost and a further payment in another 30 days, some payments taking up to 90 days. If you dont feel hungry and dont use the voucher it is of no benefit to the hotel. There was an article in the Sunday Business Post or one of the papers last week or thereabouts and I will try and dig it out.
What do you mean if you don't feel hungry it is of no benefit to the hotel Bud? I would imagine the payment to Groupon would not be as great as the payment you would have to make to gain exposure through ordinary run of the mill advertising, if it was then these websites would have no real point in being in business. And the delayed payment I am sure will be taken into account by the business, and infact a lot of the payment may well represent prepayments as a number of consumers may not have used the voucher yet.