See if this scenario rings a bell: Customer buys a product at regular price, likes it and continues to purchase it again at the regular price. The company then runs a price-off promotion rewarding first-time customers--and not previous users. Sound familiar?

Popular social purchasing site Groupon empowers businesses to employ such price-off promotions. Although the immediate sales volume and new customers Groupon can generate may be immense, many companies that use the service often do not recognize price-off promotions are a short-term tactic that can ultimately be a purchasing deterrent to existing customers.

A recent study by Rice University professor of management Utpal Dholaki confirmed the likely discontent of existing customers of businesses that use Groupon.  After surveying 150 businesses that conducted promotions on the social coupon site between summer 2009 and summer 2010, Dholaki extrapolated many insights; chiefly, Dholaki confirmed the problem with Groupon: “…a promotion can overwhelm a business and block existing customers who are paying full price."

Consider this: Who's getting the reward? The loyal customer or the first time buyer? How will the loyal customer feel when he or she finds out others are buying for less? Is there a better way?

Remind your customers that buying your quality products at reasonable prices is their reward. Let them know that if they are a repeat customer, you'll reward them for staying with you with price-off appreciations.

The ROI may take longer to develop, but it will build your brand and facilitate customer loyalty.