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Not only is their accounting on customer acquisition bogus, but how do they possibly value these customers? FTA: Groupon's subscriber count -- the one Mason s

Not only is their accounting on customer acquisition bogus, but how do they possibly value these customers? FTA: Groupon's subscriber count -- the one Mason says it is spending aggressively to beef up -- now stands at 116 million, up from 83 million at the end of last quarter. Among those subscribers, 23 million have purchased a Groupon at least once. So they have 116 million "customers," but less than 1 in 5 of those have ever actually purchased a deal? Plus aren't Groupon's customers really the businesses paying for the Groupons, not the millions of subscribers to their e-mail list that apparently don't even purchase anything from Groupon? Seems to me that the "customers" they're referring to is really the product they're selling, and at a huge loss apparently.

maukdaddy 15y ago
Exactly! Subscriber != customer. These are the exact kinds of statistics and statements that companies made in the first tech bubbble.
- damoncali 15y ago
  To be fair, Groupon calls them "Subscribers" and "Customers", defining both, in the report. It's not terribly misleading.
OpenAmazing 15y ago
No. The email subscribers are Groupon's customers - if you define "customer" as "where the money comes from". Every day Groupon sends out a daily deal to their email subscribers. Some percent of those subscribers opt to purchase the deal and go to Groupon's website and pay with a credit card. That's where the money comes from. Groupon then distributes some of that money at a later date to the merchant offering the deal. So their success is very much dependent on the size of their email list, because that is the maximum number of potential customers (payers). Zero subscribers means zero money. If all the merchants dropped out that subscriber list could still make money via affiliate or other partner revenue.
- o1iver 15y ago
  I don't understand your argument. If customers are "where the money comes from", then 1/5 of the subscribers are customers. People who don't pay are not customers, they are part of the let's call it the "marketing audience".
  - krschultz 15y ago
    He's replying to the idea that Groupon's customers are the merchants. If anything, the merchants are Groupon's partners.

maukdaddy 15y ago

Exactly! Subscriber != customer. These are the exact kinds of statistics and statements that companies made in the first tech bubbble.

damoncali 15y ago
To be fair, Groupon calls them "Subscribers" and "Customers", defining both, in the report. It's not terribly misleading.

OpenAmazing 15y ago

No. The email subscribers are Groupon's customers - if you define "customer" as "where the money comes from". Every day Groupon sends out a daily deal to their email subscribers. Some percent of those subscribers opt to purchase the deal and go to Groupon's website and pay with a credit card. That's where the money comes from. Groupon then distributes some of that money at a later date to the merchant offering the deal. So their success is very much dependent on the size of their email list, because that is the maximum number of potential customers (payers). Zero subscribers means zero money. If all the merchants dropped out that subscriber list could still make money via affiliate or other partner revenue.

o1iver 15y ago
I don't understand your argument. If customers are "where the money comes from", then 1/5 of the subscribers are customers. People who don't pay are not customers, they are part of the let's call it the "marketing audience".
- krschultz 15y ago
  He's replying to the idea that Groupon's customers are the merchants. If anything, the merchants are Groupon's partners.