Groupon Leads to Loyal Customer Mutiny

riotYou’ve heard it time and time again: Groupon hurts small businesses. I’ve talked about it, and so have other bloggers.

But check this out. Never would I have thought Groupon could cause a customer mutiny.

What Happened?

About a month ago, the yoga studio YogaWorks offered a special through Groupon to new customers: get $176 worth of classes for $50.

The deal was a success…a bit too much of a success.

My mom, who is a member at YogaWorks here in El Segundo, told me “regular” customers weren’t able to get a spot in many of the classes because there were so many new, “Groupon” customers.

Well, as you could imagine, many of these loyal customers were up in arms. They were betrayed by YogaWorks. The Groupon deal sent a message to YogaWorks loyal customers: we care more about new customers than you.

All the regular customer gathered together and began demanding that they get the Groupon deal or they will leave.

And rightfully so.

A Lesson for You

Business 101: Your loyal customers are worth more than new ones. The lifetime value of a loyal customer is much, much, MUCH more than a new customer. Especially a new Groupon customer who most likely will never come back.

Therefore, the worst thing you can do is anger your loyal customers and drive them away.

But when you do a Groupon deal only open to new customers, you are essentially telling them, “We don’t care about you.”

What Should You Do?

Simple: don’t offer a Groupon deal only open to new customers. If you do, beware: you will lose your loyal customers.

When you offer Groupon deals, tell your loyal customers about it. Reward them for being loyal customers, don’t punish them.

Are You Running a Groupon Deal?

Then be sure to check out my 5 Ways to Keep Groupon from Screwing You.

Image Credit:  Some rights reserved by dirt licker
 

Comments

  1. Melanie Kissell says:

    Really good points here — thanks for sharing the story of YogaWorks and their Groupon experience. They really blew it by offering it ONLY to new customers. What were they thinking?!

    The ophthalmology practice I work for will be setting up a coupon deal with Living Social soon for laser vision correction. We've heard too much "negative press" about Groupon. At any rate, I will personally be getting on the phone and calling our loyal patients who have had free consultations but have not proceeded with the surgery. I'm putting them at the TOP of our priority list and offering them the same deal. They deserve it!