Burke claimed that she was never informed of such a cap.

To limit the number of discounts available, Groupon offers to cap any of the deals it publicizes. Here are four lessons that small companies interested in testing out Groupon can learn from Burke's story.

The company claims to attract not only repeat customers but also those who tend to spend more when they shop.Īlthough business owners don't generally expect to turn a profit with Groupon promotions, they also don't expect to go into hock to keep their businesses afloat. It isn't hard to see why Burke and thousands of other business owners have tried Groupon since the company launched its first discount offer to Chicagoans in 2008. 'I could have done a lot more advertising for $10,000 with a lot less frustration.' 'I consider it the single worst decision I've ever made as a business owner,' says Burke. They also neglected to tip staff members, attempted to use expired coupons and subsequently became irate with staff members when they were refused. Many of them used multiple Groupons at a time. While Posies' foot traffic shot up by about a third after the promotion, the majority of her new customers did not spend above the value of the Groupon offer. Meantime, business owners like Burke can pay a steep price for marketing experiments.

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