Despite the huge success of Deal sites Groupon, it could be the nightmare for your small business if you don’t understand the basics of the coupon business. Before you jump on the deal-coupon bandwagon, make sure your business can handle it.

Customers
Often the customers from deal sites visit you onetime simply to redeem their coupons. These customers share their loyalties with the deal sites and not to you.  Hence make sure that you have to make the first hand impression about the quality of your service. Treat  them just as you would any customer – thank them for considering your deal and welcome any feedback they have.

Use every opportunity to see  if they’d like other services/ products, pitch your business to them; if you aren't selling more than the coupon’s worth, you are losing money. You could as well email signup register to collect the email-IDs for personalized deal newsletters.  However it isn’t easy to translate them into repeat customers through email marketing. You should focus on in-store customer experience. 

Don’t take more that what you could chew.
It's critical to be prepared for the extra traffic. You shouldn’t put your brand/business at stake overselling your services and not being able to meet the customer demand. Consider hiring extra employees for the first few weeks of your deal so that you could serve the extra traffic effectively. Use the deal cap to control the volume of customers. Make sure that your website can withstand the huge  inflow traffic from deal sites.

Deep discounts  drives your premium customers away
Offering a deep discount on a high-end service or product can hurt your brand perception. Deal customers are unlikely to come back and purchase your products at full price; discounts devalue your service/ product in the eyes of your regular customers.

Math
Higher the redemption lowers the profit. Generally people purchase thousands of coupons, not all of them would redeem them. Not only do you get to keep your share of money from deal sites, but you also don't have to give away any goods or services at a deeply discounted price. However be prepared for higher redemption. Before you decide to run a coupon promotion, calculate and make sure you'll still be in business if every customer redeems their coupon.