These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build a more extensive subscriber base or monetize that subscriber base more effectively than Groupon. These businesses have a more targeted user base, allowing their competitors to benefit from their existing customer base with lower acquisition costs or to respond more quickly than Groupon can to new or emerging technologies and changes in customer trends. Groupon competes with companies that address only specific verticals in its area of business. Groupon faces competition on both sides of its marketplace. The quality and stability of both our customers and merchants are key to Groupon’s business model. Groupon’s customers and merchants are at the center of its two-sided marketplace. Groupon maintains a large base of prospective merchants interested in its marketplace to be more selective and offer its subscribers higher quality deals.Ī post shared by Groupon and other offline: At times, Groupon uses other offline marketing channels such as connected television and traditional television advertising, and to a lesser extent, print and radio advertising, to help build awareness of its offerings and brand. Merchant Scale and Quality: Groupon evaluates prospective merchants based on quality, location, and relevance to its subscribers. Increased relevancy enables Groupon to offer several daily but targeted deals, thereby driving greater demand for Groupons. Groupon uses information about its subscribers to select and send deals via email, and our mobile applications can also target deals to subscribers based on proximity to the sponsoring merchant. This data allows Groupon to continue to help merchants better design the most effective deals and deliver deals to customers that better match their interests. As the volume of transactions increases, Groupon’s data about deal performance and customer interests also increases. How does Groupon make money? What is Groupon’s business model? Value PropositionĬustomer Experience and Relevance of Deals: Groupon leverages technology and scale to target relevant deals based on individual subscriber preferences.
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