Here is my take on the whole Groupon thing. Every small business should give customers, especially first time customers, a discount. We used to print in the local news paper "buy 1 get 1 free ciagar" specials and pay the paper $250 for that ad. It wasn't really worth it but we did it every month because our competitor was doing it.

This is what I see is happening with a lot of small businesses. I don't think the issue is really Groupon so much as it is the businesses not understanding what to do with these new customers. If they're just in there for the deal, they won't come back after they get the deal. This is from first hand experience.

We got customers coming back because the deal was just to bring them in. That was all. It wasn't even to find new customers. We just wanted traffic. Once we got the customers, each of us who worked there had a responsibility to get the customers excited about coming back. We were masters at it. These small business lack that skill and it has nothing to do with Groupon or any other deal advertising platform (including newspapers).