City Deals

[attheraces]

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.

[Bogball XV]

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.

[attheraces]

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.

[Bud Wiser]

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. 

[Hound]

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.

[Declan]

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?

[nifan]

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.

[Bingo]

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.

[Bogball XV]

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.

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?

[attheraces]

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.