The Battle of the Titans: Groupon vs. Living Social

Depending on who you talk to, using Groupon was either a great decision, or, as one merchant recently commented, “the single worst decision [they] have ever made as a business owner”. According to Groupon, 97% of the businesses they feature for Groupons ask to be featured again, and the overall response towards Groupon seems to be overwhelmingly positive. Still, the fact that some merchants have been left with a sour taste in their mouths following a bad Groupon experience deserves some additional attention.

Part of the problem, for some, is a lack of preparation. Groupon deals often bring in huge amounts of customers, ranging from as little as a few hundred, to as a  few thousand. Simply put, some merchants are unprepared for that sort of influx of customers and either have insufficient supplies or are incapable of managing the endless stream of people. Groupon helps prepare merchants they’re planning on featuring for this, but some customers are still left disappointed or with expired coupons.

And now, with LivingSocial having recently entered the group deal ring, that small percentage of dissatisfied customers and merchants may be quickly growing into a much larger problem for Groupon. LivingSocial, heavily funded by Amazon, plans on putting a substantial dent into Groupon’s share of the group deal market, aiming to surpass Groupon’s marketshare by January 2012.

And they’re planning on doing that by (hopefully) providing a better experience for their merchants, and ultimately the customers. One merchant that had used both services claimed that his experience with LivingSocial was much more communicative. LivingSocial actually met with them in person, whereas Groupon only dealt with them over the phone. What that resulted in was not only a better prepared merchant, but also a happier customer.

But obviously, these experiences aren’t necessarily indicative of the norm for either companies. Still, if your business is planning on advertising with Groupon or LivingSocial, being well prepared and well researched is never a bad thing. Both companies provide additional support beyond simply advertising deals for their merchants.

Finally, if you decide to go the LivingSocial/Groupon route, the most difficult part may be determining which one to choose. My suggestion? Do the research and determine that for yourself. And maybe, in that context, the customer isn’t always right.