In an attempt to push sales higher, LaFontaine Automotive Group in Michigan decided to run a Groupon offer. The hope was that the company would sell all 150 available $500 vouchers for $199. In the end, however, the deal flopped for both Groupon and the dealership.
Result of the Groupon deal
The LaFontaine Automotive Group offer ended up selling just four total vouchers. This did not meet the minimum of 10 deals required to “tip” the deal. This means that nobody was charged and no deals were handed out. In an attempt to sell more of the deals, Groupon and LaFontaine extended the deal to four days, rather than the planned two days. The deal entirely flopped. LaFontaine Automotive Group did offer to honor the deals by giving the prospective Groupon buyers $300 off the purchase of a car, and two of the four individuals did buy cars.
Why the Groupon Auto deal didn’t work
Groupon has built a very highly valued business out of offering deeply discounted coupons. According to anaylsis by TechCrunch, the average sales price of a Groupon was just less than $45. Groupon deals are often personal-care or impulse purchases like restaurants, massages and activities. The auto deal was everything that the average Groupon purchaser is not used to: high-value and a purchase most people think through thoroughly. Groupon deals are also usually for set-price items, and a $300 discount on a vehicle has a way of disappearing in a final sales price. Vehicle pricing is always negotiable, and the dealership itself already had promotions going that easily saved customers $300 or more.
Can you save money with Groupon for autos?
If you are trying to save on vehicle costs, then it is possible to save with Groupon. Other dealerships have offered deals on maintenance such as oil changes or brake jobs. These smaller deals can help you save money on routine maintenance if the timing is right. A well-maintained vehicle will always cost less to operate in the long run, be kinder to the environment and last longer.