Posies Cafe Groupon Problem
Today I was forwarded an article about the Posies Cafe Groupon Problem. Their blog post examined the effect their Groupon decision made to their bottom line. The story is quite sad, I must say but certainly a learning moment for the cafe folks.
I can’t get a good feel for what Jessie, the owner of the cafe, was thinking when he chose to use Groupon as a method of customer acquisition. His article talks about the value of the network, reaching new people and a bit about how much money they would make or lose from each coupon used. However, he left out the important parts like the lifetime value of a customer. He didn’t discuss his viable customer acquisition cost. And most importantly he didn’t reveal what their plans were for the traffic once it arrived at their doorstop.
As we discuss regularly here in posts like “How to use Groupon for your business”, these are really the most important parts of any advertising campaign. They can be broken down into 3 important categories: (more…)