November 23, 2017

Yelp and Open Table will offer Groupon type service

By any measure, Groupon has been a phenomenal success as a company. So much so that others are following suite – including Yelp and Open Table. This video discusses this as well as the question of the impact of Group Buying on small businesses… specifically, restaurants.

Is group buying going to be the new tech trend like “checking in?” As successful as Groupon is with their extensive email list, what happens if/when Facebook enters the fray?

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  1. Gary Denning says:

    I have enjoyed reading your detailed analysis of Groupon economics. My wife has launched Crossville Veterinary Hospital in Roswell and is looking to attract new customers through electronic media. What is your latest take on the Yelp vs. Groupon options?

    • mcrudele says:

      Well, it turned out that daily deals was the new big trend as evidenced by Groupon’s recent IPO. The current state is a mess though. These companies have little technical barrier to entry with their main barrier being able to create a sales force. To Groupon and Living Social’s credit, they have been really good at building these sales forces, although Groupon’s is leaving in droves. About a year ago, Yelp cut it’s daily deals sales force in half due to poor performance. And, as this post forecasted, Facebook did launch their own initiative, but it didn’t last long. As far as the daily deal business model goes … it’s on it’s way out, or more likely, it’s on it’s way to evolving.

      From a local business point of view, my position is that daily deals can still be useful in certain circumstances. If you are a new business, there is a very clear measurement of a daily deal tied to customer acquisition cost – existing customers won’t be redeeming the deal because there are no existing customers. The question becomes which service to use. There are three that I would recommend looking at. Groupon is the all-purpose big boy on the block, has the widest distribution and for a business like a vet that seems like a good fit. The other 2 I consider to be leading the pack are Living Social – which focuses on lifestyle savings like dinner and tickets to the theater – and Atlanta’s home town favorite, Scout Mob. I really like Scout Mob as a consumer, but it is much more geared toward on demand lifestyle savings. Their technology and branding is stronger than the others, though.

      For a new vet, I would say look into a Groupon deal.

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