CHICAGO — Groupon is testing a new program called Groupon VIP, the daily deals company's first foray into a paid product for subscribers.
The subscription-based loyalty program costs $29.99 a year after a free three-month trial period and provides early access to deals, as well as the ability to purchase deals that have closed or sold out to regular subscribers. In addition, Groupon VIP members have one-click access on the Web site to process refunds on coupons that they were not able to redeem in time, with the refund coming in the form of Groupon credit.
Groupon spokeswoman Julie Mossler called the program "a must-have for Groupon addicts" but cautioned that it is still in test mode. The company is "quietly testing in a handful of markets," she said.
LivingSocial has been testing a similar program called Plus since November 2011. LivingSocial's service costs $20 a month and provides early access to special and closed deals, the ability to participate in VIP events and $5 in additional credit every month.
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Groupon VIP represents the first time the company has had a paid product on its site. Signing up for Groupon emails is free, and consumers pay just for the coupons they want to purchase. The test of the subscription-based program comes as the company continues to experiment with features that offer heightened personalization for consumers and more manageable traffic for merchants.
Speaking Thursday at a Goldman Sachs-organized investors' conference, Groupon CEO Andrew Mason said personalized deals will roll out to non-U.S. subscribers later this quarter. Consumers also will see their experience improve in terms of receiving deals that are more suited to them, whether by geography or area of interest.
Subscribers will be able to store multiple locations, such as their home and workplaces, for example. And deals will come up with a thumbs-up or thumbs-down feature so that a person tired of seeing Pilates deals can click thumbs-down to keep similar offers from popping up again or indicate a preference to receive additional, similar deals.
In addition, Mason said, more features to share deals through online social networks are forthcoming, though he was vague on the details.
On the merchant side, Groupon is helping businesses manage the flow of customers they receive from running a deal. The typical "redemption curve" for a Groupon offer sees 15 to 20 percent of total redemptions taking place in the first month, followed by a drop-off and another spike close to the expiration date. Mason said Groupon is staggering expiration dates so that customers have longer or shorter redemption windows, depending on when they purchase a deal.