The popularity of daily deal coupon sites like Groupon has increased dramatically over the last year. The consumer gets a discount, Groupon gets a cut of the offer price, reportedly around 50%, and the business offering the deal gets more customers. But recent articles such as Is Groupon Good for Small Business in the New York Times question whether the benefit of more customers outweighs the cost to the small business. The products or services offered in the deal are deeply discounted after all. Further, the dramatic increase in customer traffic may be more than the offering business can handle.
I work with a dentist in Grand Rapids, Michigan who decided to gamble and offer a Groupon for dental services. Actually, we put quite a bit of thought into the decision to do a Groupon. We considered internal costs, the value of new patients, the likelihood of deal buyers deciding to become regular patients, the ability to handle a large number of patients, some of the sticky points of offering health care services to patients who may not be appropriate candidates for the services included in the deal, and more. We answered our questions as best we could and worked with Groupon to structure the offer in a way that would reduce the potential for problems, but at the end of the day, we still faced a number of unknowns. The endeavor was in fact a gamble, but we believed it to be a smart gamble.
We capped the number of Groupons at 500, but anything close to 500 was a scary number. We could comfortably accomodate within the current practice schedule only about 150 Groupon patients. To prepare for the possibility of more than 150 Groupon patients, we identified some additional days we could open the practice if needed.
As I write, the deal is still being offered. I will write again to describe how it goes.
I've Moved
15 years ago
