Could Groupon Kill Your Biz?

Groupon has been touted as one of the fastest growing businesses ever on the Internet, but has received backlash from merchants who were not satisfied with the outcome of offers on the site. The owner of Posies Café in Portland said in a blog post that Groupon is the “single worst decision I have ever made as a business owner.”

She’s not alone in her rejection of the coupon site. A recent study by Rice University found that of the 150 Groupon clients interviewed, 66% found Groupon’s program profitable, but only forty percent of the respondents would not participate in another Groupon deal.

Other findings include:

Among the service businesses, restaurants fared the worst and salons and spas were the most successful.

Businesses with unprofitable promotions reported low rates of spending by Groupon users beyond the deal’s face value and low rates of return to the business again at full price.

Rich touched on this same topic earlier today.

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