What's the best way to attract and build customer loyalty?

Have you ever purchased a Groupon or thought about offering one to promote your business? If you have, it would be interesting to know your experience especially in response to a blog http://bit.ly/p63zkD written by Jeff Gibbard who claims that Groupon does not make financial sense for businesses and that there are better ways to attract and build customer loyalty.

What do you think? I’ll look forward to receiving your comments.