Groupon Taught Me How To Simplify Offers

Groupon taught me to be hardcore at simplifying offers.
Here are 4 rules that you’ll want to keep in mind as a founder.

Groupon’s service is simple: local businesses like restaurants sell unused capacity at a discounted price to cover fixed costs.

In an ideal scenario, they make a profit through items that were
purposely not included in the deal, like beverages (high margin)

How they structured their deals wasn’t groundbreaking, but I’ve seen many sellers and founders not apply these simple rules:

RULE 1️⃣

Groupon has at least 2 options, no more than 4. 3 is ideal. That way you avoid the paradox of choice (“What should I pick?”)

Many tech products follow this structure because it’s familiar.

RULE 2️⃣

Make it understandable what’s the benefit to buying each (ideally buyers land on option 2), but don’t inflate artificially.

To justify a higher price, we’d throw in something like a dessert.

RULE 3️⃣

Gradual discounting per option to entice buying the bigger option. Make sure discounting is exponential, not decreasing.

Groupon showed the percentages that people would save. I’ve done the same in my offers when selling software deals.

You’d be surprised at how often buyers care more about the % they’ll save than the actual amount. Why?

It triggers a sense of achievement and smart buying.

RULE 4️⃣

Play with commitment. How long and how many vouchers they wanted to commit upfront reduced the cut they had to pay us.

That’s it.

Is what Groupon did groundbreaking? Nope. But it’s allowed them to once be the fastest-growing internet company in history.