Why is Groupon such a superstar when so many competitors labor in obscurity?

Groupon is a psychological lollapalooza. The author below forgets to point out a few other clever tricks, like the social proof nature of Groupon, which allows you to see how many other people have already “bought” the deal. 

The answer: clever psychology.

First of all, Groupon’s sales staff tries to cultivate deals that suit the audience in each city. If you’re in San Francisco, you get offers for Segway tours of vineyards, flying lessons and skateboarding gear. In New York City, you’re more likely to see huge discounts on music lessons, theater tickets and interesting restaurants. In most cities, you’re likely to spot lots of deals for spas and cosmetic surgery, which hints at the upscale female customers who constitute Groupon’s biggest buyers.

In suburban Connecticut, where I live, I saw offers like “$10 for $20 worth” of Italian food at a restaurant nearby, “$15 for $30 worth of dry cleaning,” and “$10 for $20 worth” of goods at Barnes & Noble. Since that’s all stuff I’d buy anyway, I took the plunge. I bought the Barnes & Noble coupon and the restaurant coupon.

A few hours later, I received my coupons by e-mail. They pointed out that I could avoid printing the coupons if I used the free Groupon app for iPhone or Android phones.

At the bookstore, I picked out a couple of books totaling $23. I showed my phone to the cashier, who had been trained to enter the Groupon codes. I was the ninth person that day to cash in.

I paid the $3 overage, and that was it. I loved it. I’d just gotten $10 worth of books free. It almost felt as if I’d shoplifted.

More psychology, of course. It’s absurd that I should have felt so giddy. I mean, is saving $10 such a landmark event? The last time you bought a house, a car or even a night at a hotel, did you haggle for another $10 off? You probably could have gotten it. But you didn’t.

Somehow, though, in the Groupon context, it feels like a steal. There’s something about the simple phrase, “$10 for $20 worth of stuff” that gets you.

Furthermore, your coupon is good for anything in the store. It’s not the same as a Half-Off Sale, where the store chooses what goods to discount.

That “tipping point” business — the minimum number of takers an offer has to have before it becomes valid — is part of the psychology, too. Sure, this element was created to protect the merchant’s interests. But let’s face it, the tipping-point requirement adds a certain thrill to the proceedings. You’re invested in the outcome.

Even the scarcity of deals — one each day — plays on your feelings. It adds to that sense of exclusivity and of serendipity.

So does the Groupon editors’ whimsical description of each deal. (“A beloved book is like an old friend: full of familiar stories, rich in endearing details and just as enjoyable when covered in highlighter,” began the Barnes & Noble coupon. “Make a new literary acquaintance with today’s Groupon.”)

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