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Local Business Feed Groupon Shoppers Need To Feel Smart

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[This is an excerpt from my new book, Groupon: Why Deep Discounts are Bad for Business]

Why are Groupons and the other online sites so dangerous?

Customer satisfaction is going down.
Shopper satisfaction at retail stores is declining upwards of 15 percent a year, based on ongoing research by Interpublic Group. Customers complain they can’t get good customer service. Gift, furniture and other local stores have closed at record rates by some accounts; just like the big-boxes.

Yet deals/coupons/discount sites have become their own cottage industry. Articles and blogs churn out ways consumers should haggle over everything and “never pay retail again.”

Retailers are seen as the evildoers, ones taking “unfair advantage” of the consumer. They’re raking in all the money with their high prices on the backs of their poor customers.

Nothing could be further from the truth. (See Part 1 of this series on discounting.)

The Need to Feel Smart
In a depersonalized world where many are anxious about their jobs, their finances and their relationships, shoppers who use coupons are, by extension made to feel smart. "See how much money I saved," is a way to say "I'm no fool."

I was reminded of this in the New York Times article Wise for Some Restaurants, Coupons Are a Drain at Others from April 13, 2011. "Diners hardly seem conflicted. “When you’re trying to save money, a discount doesn't hurt,” said Lauren E. LaRusso, 25, a graduate student in education at the University of Pennsylvania. “I assume that most of the other people at the restaurant don’t have coupons, and I feel good, that I’m a little smarter than them.”

So is it a class thing? I got something you didn't.

Is it a sneer at the restaurant for them "getting away with something?"

It's used to bolster their self esteem.

Tomorrow: Part 10: No Magic Bullet

This is an 11-part series on Groupons and their ilk, discounting and couponing in general and why they are all so damaging to your business. That's whether you are a large brand like GAP or a regional chain or local independent retailer. Here are the previous posts in case you missed them:

Bob Phibbs, the Retail Doctor®, has helped hundreds of small and medium-sized businesses in every major industry, including hospitality, manufacturing, service, restaurant and retail. He is a nationally recognized expert on retail business strategy, customer service, sales, and marketing. With over thirty years experience beginning in the trenches of retail and extending to senior management positions, he has been a corporate officer, franchisor and entrepreneur.

Learn how to improve your business with The Retail Doctor's Guide to Growing Your Business.

AUTHOR Bob Phibbs

Topics: Marketing

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