Small business owners grow more critical of Groupon campaigns

3/30/2011

Groupon has long been touted as the ultimate marketing solution for small businesses - by taking a small hit on their profitability, they are able to drive an influx of customers into their stores, many of which are first-time shoppers.

However, as the Wall Street Journal recently observed, many small business owners are wising up to the reality of Groupon. While it can be successful for some companies, many other organizations are absorbing as much as 75 percent of the deals' costs without any noticeable long-term effects.

Now, many companies are negotiating more favorable deals with Groupon or avoiding the site altogether.

"We used to just do a deal with everyone that approached us," Dani Zoldan, principal of New York comedy club Stand Up NY, which has relationships with more than a dozen deal sites, told the source. "We've become more sophisticated on how to structure the deal."

Now that businesses have more disposable cash, thanks to better small business lending conditions, more entrepreneurs are leveraging risky coupon sites like Groupon. They should remember, however, to set fair deals for themselves as well as their customers.