Yelp CEO: Groupon Model Unsustainable
September 2nd, 2011 • Posted by Spa Kat • Permalink
First there was word that Facebook was eliminating their daily deals program and then this week we heard from Greg Sterling that Yelp plans to chop their deals sales force in half. Anyone else hear the bottom dropping out of this absolutely unsustainable segment?
The economics of Groupon and other Daily Deal clone offers are absolutely out of whack, falling way short of providing long term value for most businesses. They have clearly over promised new customer acquisition generated by the trumped-up lure of deeply discounted coupons. Most businesses just can't recoup the deal's cost in new business generated from the promotions.
What's the best way to use deals in your marketing mix? Run them yourself with BoomTime Deals, they produce more long term clients by selling intelligently discounted deals to a targeted demographic.