It seems some people are catching on. Group Buy Guy posted articles on twitter over the past week. A few showcase how Daily Deal sites such as Groupon.com and LivingSocial.com are unstable and will have to adjust to make real merchant and consumer behaviors change.
Most notable is the fact that promotions based strictly on price rarely create lasting relationships with consumers. In reality, they tend to make consumers permanently price sensitive. Lowering the price consumers expect to pay can distract consumers from the service or product benefits; thereby damaging the merchant brand, in some cases forever.
Bottom line--$30 massages won’t last forever unless consumers continuously go to different merchants for service. If we want to change the way consumers interface with merchants for products and services we have to look at a Volume not Discount structure (see “Discount is BS – Volume is KING” blog post 03/21/11).
Change the world, Group Buy Guy
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