Agreed, the Evan Miller piece is far more thoughtful than the OP. Still, it doesn't consider that many groupon deals are un-, not barely-, profitable for the business owner.
For example: http://posiescafe.com/wp/?p=316 The deal was $6 for $13 worth of merchandise, but after Groupon's take, she gets to keep $3. No way to cover costs with a deal like that.. never mind profit.
And if the deal is unprofitable, there's no way to economically justify the offering unless you start factoring in soft effects like return visiters, name recognition, etc.
Indeed, there must be other effects, perhaps more important than the 'golden football' zone, that explain these loss-leader deals.
Almost any business should be willing to lose a little on product if that loss displaces more in other promotion/customer-acquisition costs. A business would be more willing to do so if they're sure the cost is reaching new customers. Perhaps that's an important part of the Groupon secret sauce -- the purchase of the 'coupon' with credit cards that provide a relatively strong identity signal. That could be used -- eventually, at least -- to target future promotions to unique new customers.
Does anyone know what sort of data the business gets from Groupon? Have any businesses offered repeat Groupons that aren't available to people who bought the first one?
> Does anyone know what sort of data the business gets from Groupon?
The only customer data Groupon shares with the merchant is first and last name.
> Have any businesses offered repeat Groupons that aren't available to people who bought the first one?
Highly unlikely. Imposing a conditional like that would complicate Groupon's process and confuse many users.
You mentioned identification by credit card number... Problems I see in that scenario: PCI compliance, UX, lower revenue per deal. And since many people have more than one credit card there is a loophole.
For example: http://posiescafe.com/wp/?p=316 The deal was $6 for $13 worth of merchandise, but after Groupon's take, she gets to keep $3. No way to cover costs with a deal like that.. never mind profit.
And if the deal is unprofitable, there's no way to economically justify the offering unless you start factoring in soft effects like return visiters, name recognition, etc.