Think Groupon, Living Social or any one of the 500 other coupon “daily deal” providers.
Think about you offering an online coupon to jump start your sales or as a great “pickme up and try me for less” for those “not yet” customers. Think what a great marketing opportunity! Think about you being an online coupon provider — one amongst a predicted thousand before the end of the year. Think about all that money! And, it all happens in one day.
Those are just a few of the “delights” of using online coupons.
Now think about how LONG FIVE YEARS are. Because, legally that’s how long you have to be willing to provide this discount or else… And the “or else” goes from lawsuits to losing your right to have a business in Texas. That doesn’t even include the federal laws, industry regulations, and more.
Did I mention the financial issues? I’m talking here about financing the deal: when you get paid, paying taxes, giving money back. Want to sell your business? These liabilities can hang on and on and on.
Of course, there’s also the marketing risk — even if you don’t offer coupon. You can have “ghost competitors” who will steal your customers from you and deliver nothing at all.
You’re not going to offer coupons? OK. Think about where the tax revenue goes. What happens to people, communities and other businesses when there’s not enough money? You know, don’t you? You may not know that those who don’t offer these discounts can get sucked in or sucked under. They can affect your staff, your operations, and your existing customers. You name it and it has an impact. And, what’s the short and long term payoff? You’ll see. Not what you think probably.
These are just some of the dangers of daily deals. This is definitely a case of “Seller and Buyer Beware”.
You say, “I didn’t know”. It’s ok. Not many do. But it’s no excuse. At Product Camp 7 on August 6th you have a great opportunity to learn about the major “whys” and “wherefores” at the “Dangers and Delights of Daily Deals” session. I’ll even let you tell your own happy and horror stories about buying or providing these “gift certificates”. They are out there. I’ve heard ‘em. And, you’ll learn some stats that will amaze you. If you are at attorney, accountant, thinking about buying a business or selling one, this applies to you and your clients.
There are affordable alternatives to the Daily Deal or if you still think you must do this, you can at least go in with your eyes wide open. We’re going to talk about some right here in Austin and other states.
Look at your email. I’ll bet just since you’ve been reading this, there’s at least one new daily deal calling your name.
By the way, I’d hold off thinking about investing in Groupon until after you hear what I have to say about legal issues, lawsuits and losses.
This post added by guest blogger Jan Triplett discussing her proposed session for ProductCamp Austin 7. Read more about Jan Triplett.