In early July, Groupon.com tried entering the automotive market to see if people would pay $200 for a $500 discount voucher on the purchase of a new vehicle. It turns out that this strategy flopped. This does not shock me whatsoever.
The amount of time and due diligence that is involved when spending thousands of dollars is no joke to consumers. Nobody buys cars on a whim unless they are Jay Leno or 50 Cent. Groupon can control what I do with $20 here and there, but I would refuse to have them involved in my decision to buy a car too.
Four consumers agreed to pay $200 for a $500 discount voucher on a new vehicle purchase at the LaFontaine Buick-GMC-Cadillac dealership in Highland, Michigan. Groupon and LaFontaine made the miniumum voucher purchase $10 for the vouchers to be issued. Groupon extended the offer from two days to four days, but the deal still did not go through.
“We did get a lot of chatter,” stated LaFontaine general manager Robert Milner. Milner received many media calls and from other dealerships to see if the deal helped them out. They ended up selling two new cars to two out of the four Groupon customers and honored the vouchers even though Groupon cancelled the deal.
Milner has not given up on using Groupon for sales yet. The dealership spends about $370 in advertising per car sold.