The Average Groupon Customer Has Purchased Four Deals

Groupon’s aggressive marketing tactics have been effective at getting new subscribers to sign up to receive its daily emails.

Already, this year it has doubled its subscriber base to 115 million, up from 50.58 million at the end of December.

But has the daily deals company been good at getting people to buy?

For the first time, Groupon has provided some insight into that question as part of its second-quarter results released today in its amended S-1 filing, which also deemphasized a controversial accounting method that subtracted its marketing costs from the bottom line.

Here’s the deal:

  • Groupon had 115.7 million subscribers at the end of June.
  • Of those subscribers, only about 20 percent — or 23 million — have ever made a purchase. Those are called cumulative customers.
  • The average subscriber (not customer) spent $18 in the first half of the year, down from $21 last year.
  • The average customer over the lifetime of a membership has purchased four Groupons, up from three a year ago.
  • The average revenue per Groupon sold in the first half of the year was $25, up from $23 in the same period 2010.
  • The number of merchants Groupon worked with in the first half of 2011 increased to 135,247, up from only 12,468 in the first half of 2010.

Converting subscribers into customers will be key for Groupon in order to justify its high marketing costs.

But with only two and a half years of operating results, it’s difficult to ascertain if things are headed in the right direction. Not to mention that the averages easily get weighed down by the massive numbers of subscribers who are signing up.

For instance, the average revenue per subscriber fell by $3 year over year, which may sound bad, but at the same time, the number of subscribers skyrocketed by 1,007 percent.

It’s also hard to draw any conclusions about the number of subscribers Groupon has been able to convert into paying customers.

For example, as of the first half of the year, 20 percent of subscribers had ever paid for a Groupon, down from 22 percent for the first six months of 2010. For the full year 2010, the number was even lower, when only 17 percent of Groupon’s 50.6 million subscribers were considered paying customers.

Groupon just rolled out a promotion today that could get these numbers really moving by the end of the month. If a subscriber buys any two Groupons by August 31, the company will give him or her $10 to spend on an offer in the future.


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