Groupon Talks Managing Capacity, Following Japan Apology

As previously reported, Groupon has apologized for a recent deal gone bad in Tokyo. In ...
Groupon Talks Managing Capacity, Following Japan Apology
Written by Chris Crum
  • As previously reported, Groupon has apologized for a recent deal gone bad in Tokyo. In the apology, CEO Andrew Mason mentioned that Groupon has "capacity planning formulas" to help merchants figure out the number of customers they can handle from a Groupon deal. As you may know, a common complaint about Groupon is that it can send too many people to a business, which does not have the means to meet customer demand. We asked Groupon to shed a little more light on these "capacity planning formulas. 

    "There are many factors to be taken into account: What’s the present customer traffic level during off-hours and during peak hours? Weekdays vs. weekend? What’s the maximum number of customers the business is able to serve? Is this an appointment-based business?" Groupon spokesperson Julie Mossler tells WebProNews.

    "We shape every deal to meet the needs of the business while making it easy for customers to redeem," she adds. "So, there may be an extra value given to customers who redeem the Groupon during ‘off’ hours, but we’ll never restrict redemption to inconvenient times."

    Many of the capacity planning formulas are proprietary, Mossler says, but the company does provide a summary of merchant preparation tools at

    The Groupon Equation, according to Groupon

    "Overall, we find the businesses who do the best on Groupon are those who know their business inside and out, are honest with themselves and us regarding the amount of traffic they can feasibly support, and take advantage of the host of merchant preparation tools our merchant services team provides," says Mossler.

    We also asked about what Groupon is doing with regards to quality control of deals, as the company recently addressed this following some Groupon ads that were flagged in the UK as misleading. 

    "Groupon is known for the high standard of quality that we hold ourselves and our businesses against, both in the U.S. and overseas," Mossler tells us. "We turn away seven businesses for every one we feature; those Groupon chooses to work with have passed as many as seven layers of quality control, looking at online reviews, word of mouth, the structure of the business and current traffic capabilities, etc."

    "We’re conducting continuous training with our international teams to ensure that the best parts of the customer experience in the U.S. are implemented throughout the global Groupon network," she adds. 

    Groupon provides merchants with a variety of resources related to deal preparation, including deal optimization, redemption cycle planning, webinars, editorial write-ups, redemption tracking, and of course the capacity planning tools, using calculators customized to address specific dynamics of the advertiser’s industry.

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