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You get what you didn't pay for

3 min read

The Problem With Daily Deal Sites

On the surface, daily deal sites like Groupon seem to be an innovative, fun way to connect customers and businesses. But underneath, it’s a different story. These ‘deal sites’ depend on two things: an insecurity among business owners, i.e. “I’m building it, but what if people don’t come?” and the general laziness of the marketplace.

Often a business owner’s insecurity sounds like this:

“I’m not totally sold on the value of what I produce, so I’m going to discount it and then pay a go-between to herd somebody, anybody, into my shop with the promise of a cheap deal, and then maybe, they’ll decide to like my product even though I’m not fully behind it. If they believe in my product, I’ll be able to believe in it and then I can lose my dependency on the go-between.”

The customer’s side of it doesn't require much explanation. We all know this one. You try the free sundae syrup at Costco and evasively tell the attendant, “Yum - I’ll have to buy some of that next time” - but you never do. No, you are much more likely to buy things that you tried at your friend’s house because you trust them.

See a problem here? You, the business owner, are asking a derivative business or ‘moocher’ as Ayn Rand would call them, to bring a random soul into your store in hopes they’ll value something that you feel shaky about. The deal site wants to make money on your insecurity about your dream, but customers drawn to a business by daily deal sites like Groupon rarely stay.

Why not? Because people are emotional. If you don’t believe enough in your product to stand for its value, why would anyone else? They respond to your confidence.

They can feel you not standing for your product, so even if they do buy something, they won’t join your tribe. If you have to sell out your dream to the moochers on the internet then there is either some “courage” work for you to do between you and you, or you have created the wrong product. Most of the time, in our experience, it’s the former. Either way, it’s not an enticing situation for the customer. There’s an ick factor underneath; a back-alley deal that you and the customer would just as soon wash your hands of. You are subtly embarrassed and apologizing for your dream, your vision, your heart sweat, and they’re impulsively following a ‘deal’ to get something they want without having to really choose you and your product.

"If you have to sell out your dream to the moochers on the internet then there is either some “courage” work for you to do between you and you, or you have created the wrong product."

The only one in the equation who clearly believes in something is Groupon. They believe in your insecurity and that there are always enough people looking for something cheap; the herd who runs from one deal to another never standing still long enough to be touched by anything authentic or find out what they truly want or need.

Of course we all want new customers to find us, but this isn’t the way. Don’t try to fit into a world that lost sight of the dream. Stand behind your product, find out how to reach your real customers and give them an experience they haven’t had before. They will tell everyone.

If you'd like to make a change in how you lead your business, we invite you to attend the upcoming EMyth Leadership Intensive.

Read the New York Times article that inspired this post.

Slade Machamer

Written by Slade Machamer

Slade is EMyth's VP of Sales. He and his team work directly with our clients and our coaches to create rich and rewarding coaching experiences.