FREE MASTERCLASS
Join #1 bestselling author of The LinkedIn Code for a free training on "Cracking The LinkedIn Code"
register for our free webinar

Groupon & Living Social Inflated Regular Prices to Make Deals More Attractive

A study released by ThumbTack.com is bound to take a bite out of business from online discount juggernauts, Living Social and Groupon. The study reveals a comparison for local services such as home cleaning, handyman service, and interior painting. The conclusion?

5 out of 5 Daily Deals Appeared ABOVE Market Value

Thumbtack compared 5 daily deals with regular market value, all within the service industry, and discovered that they were consistently higher. Keep in mind, this is only for the “local services industry” which accounts for only 11% of daily deals offered. Although the study observed very few deals, Groupon and Living Social’s consistency in under delivery was an eye opener.

The Deception In Seattle

One of the more deceptive offers was from Groupon in Seattle for 2 hours of handyman services. It was priced at $79 – an alleged discount of 64% from the regular price of $220.

Thumbtack.com, a site where you can find local services, had 57 Seattle handymen for an average rate of $42/hour with the lowest at $32.50/hour.

Groupon’s normal rate: $110. The discount rate…$39.50/hour.

There’s Still Hope

The good news is that this seems to only be affecting the service industry. During my experiences with Groupon, I have cornered some great deals at restaurants and casual fun like bowling and rock climbing with nothing but good things to say.

What has been your experience with Groupon & Living Social or similar services? Leave your comments below, positive or negative!

Comments

  1. Gaston says:

    I actually have bought a few things. Green Maids, or something like that. 2 hrs for 1. I never did any research to find out if they had inflated the service. But I will say that subconsciously they MUST have worked knowing they were making only half of what they normally make, because damn they were slow!!!

  2. I agree Susan it can be valuable for businesses if done right. I’m glad to hear you’ve had positive experiences.

  3. Offers says:

    I think it’s down to each business to “put down the numbers” and see if an offer on sites like GroupOn adds up and makes sense for them. For a lot of businesses it does not though, which is why EveryDayOffers.co.uk started in the UK.