In a computer repair thread, CallThatGirl asks about advertising her business on Groupon. The trouble with Groupon for service businesses is that your production capacity is limited by the number of employees you have, and unless you have a large number of employees that aren’t keeping busy, you might get overwhelmed with the short burst of work. If your business gets overwhelmed, won’t that reflect badly on your business when you start providing shoddy service to your customers?
If your service normally goes for $100, but you offer half-off, and Groupon takes a $50 cut, then you just paid $75 to acquire a price shopper for one service. Groupon customers likely not going to come back to you again until you have another offer like that.
Bottom line: could that cash be better spent on acquiring a customer that is much less price-conscious? I certainly think so. But inn case you are not convinced, read this.