Today Groupon's running a deal you don't see every day: A 57 percent discount on a National Louis University course. Not so surprisingly, the unconventional coupon has elicited some mockery. "The reality is... look how happy that girl in the picture is. Buy now! Think of what a great story you'll have to tell your students at your failing school one day: 'Your teacher comes from Groupon,'" writes Gawker's Hamilton Nolan. Ok, so a coupon for college is a bit silly, and maybe tacky, but in this case it actually makes sense for the college and its students.
Groupon has a tendency to kill small businesses, in this case the business--the school--will benefit from the deal. Say a cafe has a deal for discounted coffee: people will purchase the Groupon, get some cheap coffee and might never come back. Of course, Groupons work as effective marketing tools for some establishment, but many don't benefit, reports Forbes.
Out of the 150 businesses surveyed, two-thirds reported that their Groupon promotions were profitable–but the remaining third claimed to have lost money on their Groupon experience. Businesses in the latter group reported that only 25% of these customers spent money beyond the face value of their Groupon discounts, compared to a 50% rate for the customers of businesses who reported a profitable promotion. Similarly, just 13% of the latter group’s Groupon customers returned to the business in question, compared to a healthy 31% of the former.
But this particular promotion is designed to benefit the school. The monetary benefit doesn't depend on converting someone to a regular coffee consumer at a cafe, instead it aims to get someone to finish a degree, a much shorter term goal than turning someone into a perpetual latte consumer at Cafe X. On the other hand, the purchaser doesn't get the degree right away, explains the Chicago Tribune. "Although the course will count toward a graduate degree, it's only worth three of the 36 credits students need to graduate, Zivin said. Prospective students will need to go through the school's regular admissions process to take further courses."
As a degree is a much bigger, yet finite investment, the school is likely to lure potential students, who may see cost, among other things as a barrier, continues the Tribune. "There are all kinds of factors in the K-12 world that are really discouraging teachers and people seeking teaching degrees," Jocelyn Zivin, the vice president of marketing and communications for National Louis University, a private, non-profit university, told the Tribune. "We'd like (potential students) to understand what the realities are, whether you are committed to this profession ... and see if you have what it takes."
In addition to lack of interest, small businesses face issues with daily-deals because their infrastructure can't handle the influx of new costumers. Yet this deal is designed to weather that possibility. "Groupon brings in a pretty robust amount of business in a pretty short period of time," Groupon using business owner Greg O'Neill told Reuters. "Too much of a good thing can turn into a bad thing--if you end up creating a situation where your staff or your infrastructure can't handle it." But this class only exists for Groupon purchasers, meaning the college will be more than ready for the influx--that is, if there is one. Thus far, only two people have opted for the deal.
This article is from the archive of our partner The Wire.