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How high was cannibalization, i.e. existing customers using the Groupon deal instead of paying full price?

Disturbingly high. Repeat customers were also kind of scary.

What do you mean by scary?

I can understand if you don't want to disclose exact figures on cannibalization, but can you provide any indication?

Since when is it a bad idea to give discounts to existing customers?

It's a bad idea to give a discount to someone who was already going to buy your product at full price. It's an even worse idea to sell them a product and get 25% the revenue you would otherwise.

I agree that it's better to be more thoughtful in how you handle existing customers and it's even worse spending 75% to give a 50% discount, however I don't think it's necessary to hide Groupons from existing customers. We encouraged all our customers to participate in our daily deals and spread the word. The customers appreciate it and we get more business.

You give regulars perks, not cash. If you give them a discount on something, it should be a discount that can convert to additional spending.

If you run Groupons often, you're like one of those restaurants that put a 20% off coupon in those coupon magazines.... you're reducing the customer's spending expectations by 20%!

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