Merchants Gotta Fight for Their Discount Rights


bill_smallADOTAS – David Perlman, the owner of Manhattan eatery Essex, told Bloomberg Businessweek that although he got slightly more consumer reach through a Groupon campaign, he would more likely run a similar coupon campaign with OpenTable again. OpenTable, which introduced a couponing program last month, is simply more geared toward restaurants, he said.

A study by Utpal Dholakia from Rice University’s Jesse H. Jones Graduate School of Business found that restaurants had the most unprofitable campaigns on Groupon. The problem is that Groupon users tend to be deal-hunters and are unlikely to return without further incentive. OpenTable users, however, are more likely food connoisseurs that will return to a restaurant regardless if there’s a deal.

But restaurants aren’t the only ones unhappy with Groupon’s services — a third of respondent’s to Dholakia’s study reported unprofitable campaigns. In addition, a widely publicized case of fraud and a virally spread, heartstring-pulling tale of Groupon woe from a small cafe with a precious name have left many businesses wondering whether Groupon has their best interests at heart.

In response, social community site and Groupon competitor BuyWithMe has composed a “Merchant Bill of Rights,” especially addressing its commitment to local businesses using its couponing services. It reads:

  1. Businesses have the right to a knowledgeable, local partner.
  2. Businesses have the right to be treated as a vested partner
  3. Businesses have the right to full transparency
  4. Businesses have the right to be paid in a manner that supports your growth
  5. Businesses have the right to multiple marketing options.
  6. All businesses should be treated as vital to an ecosystem that thrives through conscious capitalism.

Definitely an interesting angle to take — especially when the Rice University study also found that most businesses thought even lower of Groupon’s competitors.


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