Groupon success catastrophe

I bought a Groupon for a local restaurant. About 1 week before it expired I went to make a dinner reservation and it turned out that they were booked up for the next 3 months - and so effectively I could not use the groupon for dinner. I have to use it for lunch, and given the price and the value of the coupon, I need to go with a group of 4 people!

I spoke to the owner about the situation, and based on his sad tone I asked him if the groupon promotion had been a good thing. He was adamant that it was the worse thing they had ever done and he would never do it again! They had sold tons of groupons and everyone waited till the last week or two to try to book and suddenly they are overrun.

Here's a similar story of a groupon success catastrophe that just came across the wire:

"The bakery, based in Woodley, received 8,500 requests for a dozen cupcakes, far above the normally 100 it produces a month. Brown suddenly had to make 102,000 cupcakes. Brown's company only employs eight people, and she had to bring in an outside agency to handle the orders. The temporary agency cost her $19,500, effectively wiping out her year's profits, MSNBC reported. "Without doubt, it was my worst ever business decision," she told BBC. "We had thousands of orders pouring in that really we hadn't expected to have. A much larger company would have difficulty coping." (from Global Post)

Posted on December 2, 2011 .