To turn its fortunes around after a long period of performing below (admittedly inflated) expectations, Groupon changed a core element of its business model sometime last year. The discounts available through Groupon coupons used to be subject to a host of restrictions, (e.g., “the deal is ON if at least 100 customers subscribe”), but now most Groupon coupons can be used any time, any day. Will this change turn the company’s fortunes? Actually, it could turn out to be the nail in Groupon’s coffin. The sustainability of a business model depends on its ability to make all concerned parties better off. In the case of Groupon’s discounts, customers certainly get value by enjoying deep discounts and Groupon does well the more its discounts get used. A more interesting question is whether the merchants supplying the discounted goods and services also benefit: What do they get out of participating in a Groupon program? Academic research has consistently found that running a deal using Groupon (or one of its competitors) has two main implications for a business: more customers in the short term but lower favorability ratings. Hence, short-term gains in traffic come at the expense of a lower future traffic and the overall value proposition to the merchant remains unclear. Get the full story at Harvard Business Review Read also "Groupon’s mobile platform makes up 50pc of Q3 transaction" at Mobile Commerce Daily