If I have to be honest, I absolutely detest the business model of discount sites. It’s downright depressing to know how the business operates and functions. Once you get to its core, you know it’s not going to be sustainable in the long run. The only winner is Groupon and the clones.
Discount sites in general, breed new kinds of behavior that besides driving prices down, cultivates a of mindset in customers that there is little loyalty in company. Whoever offers the cheapest gets the nod. It becomes a platform for price war to rage.
It drives genuine businesses out of the game. It creates downward pressure on prices. It doesn’t enable businesses to create value for its customers, placing emphasis on currency instead. It makes customers deal-prone. It becomes a vicious cycle where customers are addicted to the deals, not the companies or products or services.
Deal is the name of the game, as such, it becomes a almost ritual-like routine where users log in to check out the site, and buy things they probably don’t need or want.
Groupon’s model is simple, it’s built on impulse purchases. It stimulate group buying, that’s why it always encourages people to share the deal and spread the word. The word-of-mouth is the strongest form there is and seeing your own circle of friends buying can only add exposure and credibility.
As much as I hate these discount sites, I do admire the mission statement of Groupon. A search didn’t turn up the results I wanted, so I have to type it out from my trusty moleskine.
We want the time people spent with Groupon to be memorable. Life is too short to be a boring company. Whether it’s with a deal for something unusual, such as fire dancing classes, or a marketing campaign such as Grouspawn, we seek to create experiences for our customers that make today different enough from yesterday to justify getting out of bed.
We believe that when once-great companies fall, they don’t lose to competitors. They lose to themselves – and that happens when they stop focusing on making people happy. As such, we do not intent to be reactive to competitors. We will watch them, but we won’t distract ourselves with decisions that aren’t designed primarily to make our customers and merchants happy.
I can’t promise, word by word, it’s the exact replica of what Andrew Mason said. Nevertheless, it’s a fantastic piece of statement that is inspiring to employees to customers to just about anyone.