That Groupon Feeling

By now everyone knows about uber discount site Groupon. Now, according to a recent article in the Naperville Sun, we can look forward to Groupon Works, an outreach venture put on by the company to educate small businesses about new technology - especially social media. Interesting.

But more interesting still is the study embedded in the article. That study reports that, according to a Raymond James Survey, only 4% of 115 surveyed Groupon usering merchants consider the company's promotion to be profitable.

While there's no denying that using social media makes you look hip in the eyes of customers, the cost associated with such efforts, like offering a discount for your product on Groupon, is not necessarily worth it if you have limited funds to start with and the returns aren’t making you money.

Groupon itself may be learning that lesson as its customers rebel and the value of its stock continues to plummet.

So ... maybe Groupon isn’t the answer after all.

Mazyar Hedayat is an Attorney and holds an MBA from the University fo Michigan. His firm, M. Hedayat & Associates, PC, has been helping small businesses in the Chicagoland area for nearly two decades.