There will always be another business who will enter the market and try to undercut the current market rate to take away business, it’s the way of the market. As long as you offer the best price, they’ll stick with you, but when the business down the street (or across the country) can beat your lowest price, they’re gone. Bargain shoppers base their purchasing decision solely on price, so they will never be loyal customers. You’re starting off on the wrong foot with a new customerīy offering an incredibly discounted price, the hope is that the new buyer will become a long term customer after trying your product or service, or the discounted product/service will be a loss leader (you’ll take a loss on this product or service but make it up on back-end products that you’ll additionally sell them). The reason for this long term buying behavior is two-fold: 1. By offering an incredibly low price for a limited time, this “deal” will attract many new customers, but they will seldom become long-term customers or “ raving fans.” Their entire buying decision is based upon price, not quality or service. Most customers who utilize these “daily deal” websites are bargain shoppers. From a long term customer acquisition strategy, it’s a VERY BAD idea, and here’s why.

From the standpoint of broader business exposure, it’s a good idea. Many businesses are hopping onto the Groupon & Living Social bandwagon, hoping to bring in new customers who wouldn’t normally visit their place of business.

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