Groupon: Deal-Givers Should Beware of This Double-Edged Marketing Sword

Groupon: the double-edged marketing sword for our times.

Groupon is without a doubt one of the sharpest double-edged swords in marketing and public relations today.

On one side, it can slice through the marketplace chatter and clatter and get your company’s message out to large chunks of the population in a single, smarmily scrawled offer.

 On the other side, it can irritate existing customers wondering why they were stuck with paying the regular price even as it threatens to devalue the service or product you’ve worked so strenuously to position at a given price point.

This dual, and dueling, reality came to the fore yesterday for Inside Edge PR. I posted a Groupon deal offered by one of Inside Edge PR’s clients on the company’s Facebook page. Within hours, and in the wake of some criticism from clientele, we removed the post.

The negative potential outweighed the good intentions of alerting our very own to the offer. Over the course of the day, we enlisted a good number of people to check out the business—and many of those people never would have done so without Groupon’s reach.

It’s much too soon to gauge the deal’s overall effect, obviously. Now comes the vital task of measuring the longer-tem impact: what’s the ratio of one-time bargain-hunters to long-term loyal customers that they help generate?

On a related note, today Bulldog Reporter posted a story on a study by computer scientists John W. Byers and Georgios Zervas of Boston University and Michael Mitzenmacher of Harvard.

According to the piece, bearing the headline, “The Dark Side Of Daily Deals: New Study Suggests That Offering Deals On Groupon Can Damage Your Company’s Reputation,” these researchers “found that ratings scores on Yelp for businesses running daily deals are 10% lower on average.”

Ah, yes, Yelp. No stranger to controversy over its own advertising and rating practices, let’s save the Yelp can of worms for another day.

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