Tell HN: Another Groupon success story

Following up on this thread (http://news.ycombinator.com/item?id=2654788) I wanted to share our experience with both Groupon and other daily deal sites as to better illustrate which conditions make these deals good for businesses.

To start, we've been on Groupon 3 times (NYC, Hartford & Sacramento) plus on other sites 4-5 times now.

We're an online business, with fairly sophisticated software running our online store (Django for those interested). This means that redeeming 10 Groupons or redeeming 1000 Groupons makes no difference to us. We upload the codes from the CSV Groupon sends us and that's it, from there on, our only interaction with customers is through our site.

Our breakage is about 30% and this seems to be the number no matter which daily deal site we've been with. Even when giving up 50% of the coupon price, we still profit. That's the nature of our business - most aren't like us.

So with those facts out of the way, here's what we've learned:

1) Coupon customers are generally "meaner" and feel they're entitled to more than others 2) You can (and should) negotiate hard with the deal sites. We started out doing the 50/50 share, but learned quickly and now get as much as 82% of the sale. 3) Up-sell hard to these customers, if you can. Again, our business is all online so we offer e-books add-ons, we offer different books to add, we offer a better product (hard cover) that customers can "upgrade" to. 4) We have about 10% repeat customers and about 30% buy something more than what their coupon entitled them to.

Businesses who view Groupon et. al as profit drivers are misguided. Is that Groupon's fault and should they do more to educate customers? That's another thread of discussion. If businesses view daily deal sites as simply another marketing expense and have the capacity to track customers and upsell accordingly, then maybe the cost of acquisition is worth it. For us it is, for some companies by the sounds of it, it isn't.

tldr; For some companies, Groupon is good and their model drives value for the merchant. For other (most?) companies, it isn't.