When the average business runs a Groupon deal that leads to a surge in sales, there is a corresponding drop in that business’s Yelp ratings. According to a new paper by professors Giorgios Servas, John Byers, and Michael Mitzenmacher, the drop is due to a “mismatch between the preferences of Groupon users and the businesses whose offers they accept.”
Tim Worstoll of Forbes summarized the key finding as,
A Groupon is going to attract in the marginal customers for whatever it is. And marginal customers are likely to be less enthusiastic simply because they are marginal customers. They’re marginals because the basic offering is not exactly aligned with their interests: thus the finding that marginal customers find the offering not exactly aligned with their interests or tastes is not entirely a surprise.”
If you’re a private counselor, don’t serve the marginal customer. If somebody isn’t a good fit for your business, they’re predisposed not to be delighted by what you do and how you do it. So don’t take them on as a customer. Politely refer them to someone else. Yes, you’ll lose the profit of one (marginal) customer in the short run. But you’ll be able to spend more time doing a great job for the people who are your best customers.
And if you’re a student, don’t be the marginal customer.
If you join an activity you don’t want to do just because you think it will look good on a college application, you’re a marginal customer for that club or organization. You’ll likely never do your best work because the fit just isn’t there.
Should you take a calculus class over the summer because you think Stanford will appreciate it, or should you take the class you really want to take, like screenwriting, Italian cooking, or basic first aid? (Hint: Drift toward the classes where you'll be the best customer).
Why apply to a college that isn’t right for you just because it’s prestigious? If you’re going to spend four years of time and money, don’t do it someplace where you’re a marginal customer. Think about why you’re going to college in the first place and what you hope or expect to gain from your time there. Then find the places that can give those things to you, where you’ll take advantage of everything the colleges have to offer. With more than 2000 colleges out there, there’s no reason not to go to one where you’ll be one of the best customers.