By Quentin Fottrell
Half-off deals are the first deal of many, now that industry leader Groupon has started offering rewards for repeat customers.
Groupon said Wednesday that it would start offering rewards to encourage consumers to go back to businesses where they’ve redeemed a voucher. Took advantage of a 50%-off massage? Maybe there’s a free manicure if you go back. Or a restaurant might offer free dessert, or a steep discount on a bottle of wine. Groupon says any offers made will be up to the retailer. “We will email customers to tell them they’re approaching a reward target, and track your purchases so you don’t have to carry a reward card,” says Groupon spokeswoman Julie Anne Mossler.
The program is likely meant to entice more businesses than consumers. Judging by the several hundred sites on the market, consumers just can’t get enough of 50%-off facials, kickboxing, Thai takeout and other cheap luxuries. Yet studies show that less than a quarter of customers go back to that business for a second, full-price visit. And why would they, when there’s another spa, gym, or restaurant offering that enticing 50%-off deal? That poses a problem for sites trying to entice retailers, and retailers hoping to gain new customers by offering that steep discount.
But Dan Hess, founder of DealRadar.com, a daily deal site aggregator, says it’s a win-win for bargain-hunters, too, “except if they over-stretch their budget or are disappointed by the product or service they’ve bought.” Matt Wallaert, social and behavior psychologist of digital strategy firm Churnless.com, says daily deal rewards make more sense for a “need” (grocery store) than a “want” (head massage): “Try to separate the discount from your decision to make the purchase,” he says.
Readers, what does it take for you to go back to a business after you’re out of daily deals?