For those unfamiliar with Groupon, it is essentially an email marketing offer that consumers can opt-in to receive a daily email highlighting a product or service, usually from a local company, at a heavily discounted rate (between 35% and 85% off the regular price). I have participated in Groupon a few times, opting to purchase for myself and as a gift. Some examples of products/services include; Massage/salon services, flowers and home décor, and food and drink.

With 218,000+ “likes” on Facebook and offering deals in more than 150 cities across the nation, founder and CEO Andrew Mason has created a way to bring buyers and sellers together to offer an unbeatable deal. Groupon claims that they have “saved consumers more than $300 million dollars to date and has generated millions in revenue for the business it features.” (http://www.crunchbase.com/company/groupon)

from www.compete.com

Don’t tell that to Jessie Burke, a coffeeshop owner in Portland, OR. She almost saw her business go under because of Groupon. According to Burke, Groupon sold customers a $13 credit for the coffeeshop for $6, and then sought to keep the entire $6. Eventually, Groupon and Burke ended up settling on a 50/50 split and each got $3 from each purchase. Groupon’s $3 was nearly pure profit, but the coffeeshop had to use that $3 to cover $13 worth of food and drink. (http://blog.redfin.com/blog/2010/09/groupons_success_disaster.html) With over $1000 groupons sold for the promotion, the Groupons took a financial toll on Burke’s bottom line. The pitch that Groupon sold in was that the amazing deal would attract new customers and then would result in repeat business. According to Burke, that was not the case. “Over the six months that the Groupon is valid, we met many, many wonderful new customers, and were so happy to have them join the Posies family. At the same time we met many, many terrible Groupon customers… customers that didn’t follow the Groupon rules and used multiple Groupons for single transactions, and argued with you about it with disgusted looks on their faces or who tipped based on what they owed.”

On 9/15/10, Groupon Atlanta offered a daily deal for Donna Dawes Photography. The deal was a 1 hour photo shoot, and 8”x10” print, a DVD of the images, and 20% off additional prints for $65 (approx $500 value) WOW! That deal seemed too good to be true, and as it turned out, it most definitely was. In the discussion thread that Groupon offers on the site, a user noticed that upon visiting the website of the photographer, she had been promoting her work with stolen images from other photographers and over-promising to deliver services that would be too difficult for a small company to carry out. Users became suspicious as to how a small photography shop would be able to handle the over 2,000 Groupons and a barrage of comments began flooding the discussion boards. The deal was eventually pulled and customers were refunded their money.

Sentiment before 9/1

Sentiment graph 9/1-9/17

Tag Cloud - Keywords before 9/1

Tag Cloud - Keywords After 9/1

You can see with the graphs and tag clouds on the left that there has been an increase in negative sentiment towards Groupon since the start of September. We can attribute this negativity to the issues seen over the past 2 weeks.

This calls into question whether Groupon should enforce limits when deals like this are unreasonable, which is currently on the onus of the merchant. (http://techcrunch.com/2010/09/16/groupon-photography/) Groupon states that they offer merchants to cap the deal, but when a small business like Posie’s and Donna Dawes Photography are sold in on the opportunity to gain hundreds (if not thousands) of new customers, the temptation can be too great. The question then becomes, “Should Groupon be more diligent about screening out deals offered by small businesses, or should that ultimately be the responsibility of the business owner? We will watch closely as this story continues to evolve. Let us know what you think.

Update: You can read Groupon’s response here: http://groublogpon.com/cities/too-much-of-a-good-thing/

1. A quick response can go a long way
2. You may have to respond as you, not your company
3. Give yourself more than 140 characters to respond
4. Let someone else respond for you (your fans for instance)
5. Know when to let it go

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“This could end up making crisis PR much less about seducing journalists and advising clients to engage in mea culpas and more about maintaining numerous online angles of attack on the Big Bad Story. The upshot is that crisis PR will be far less feared, but much more effective.”

While the article does not explicitly call out the need for digital agencies and social media strategists to employ crisis PR strategies, it does support the idea that crisis PR is an opportunity for us. It even throws out the current Goldman Sachs crisis as an example.

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Mashable recently posted the article “HOW TO: Deal with negative feedback in social media” to help marketers identify the different kinds of negative feedback they may get, know if they should respond to that feedback and understand how best to respond. Here’s what you should know:

The world of communication has forever changed. Along with the shift in communications we are also seeing a shift in the way we as marketers must engage with our customers. The methods of mass communication by defining large markets through demographics, geographics, psychographics and consumer behavior have proven to become too generic for the new, empowered, overly-communicated consumer. By wanting to be engaged as individuals, consumers are demanding better understanding on a personal level. To become better marketers and continue to provide content and products that consumers will want to integrate into their lifestyle, we need to dig deeper and better define our consumers and what goes on in their personal, daily lifestyles.

One major factor attributing to the shift in communication is the shift to a more digital world. Enhancements in Web 2.0 technologies, mobile devices, and real-time information have created a more engaged customer. Therefore to better understand our customers and their digital behaviors, we need to add a few more definitional parameters; Technographics, Socialgraphics, and Mobilegraphics.

Technographics: The understanding of how a user interacts with technology, what technologies they interact with, and the involvement level of these interactions.

Socialgraphics: The understanding of how social the user is. What platforms they use; how often; what is their influence within their network; who are the people that influence them; what content do they share, interact with, and find beneficial; what are their affinity connections?

Mobilegraphics: As an extension of technographics and socialgraphics, we need to look at how users gather information on the go. Does our customer use a smartphone; do they email from their phones; do they use social apps on their phones; does their phone have internet connectivity; how often do they interact with their devices; etc?

When creating any type of integrated marketing campaign in today’s world, we need to really drill down and understand how our customers utilize the digital world in their daily lives. By defining our customers with these additional parameters, we will have a better holistic view of the individual within our smaller niches markets, forever enhancing our communications’ effectiveness.

Courtesy of Flickr - JulianBleecker

While reading a recent interview with Social Media Guru Erin Byrne, something that seemed insignificant caught my eye and has really taken over my thoughts over the past 24 hours. The two opening questions alluded to a new way that we as marketers need to think about how we communicate with our individual customers:

What do you see as the biggest changes in the communications landscape in the last five years?
The most significant change is the change to a many-to-many dialogue. Companies can no longer have one-way conversations with stakeholders. To truly be effective, you have to create dialogue and larger conversations. At the same time, companies should stop trying to control their messages and must focus on real-time branding.

Define “real-time branding.”
Real-time branding is the ability to leverage social tools to react and respond to stakeholders individually-with the right message for the right person at the right time. But it’s important to note that, while people talk about online, online, online, it’s really about integration. Conversations go online, then offline, then online again. The most successful PR professionals use traditional PR to build awareness and then use social media relations and digital tools to drive from awareness to action.

Amazing, right? There are a few things I wanted to bring to further light and discuss in more detail:

“The most significant change is the change to a many-to-many dialogue”
An amazing revolution brought on by the Web 2.0 technologies and the communities that have been forming in the social realm. Everyone now has a voice if they want one; each and every customer, advocate, and cynic. We now have to provide relevant content for, not only the masses, but also each individual. The only way to do this is “create dialogue(s) and larger conversations.”

“Real-time branding is the ability to leverage social tools to react and respond to stakeholders individually-with the right message for the right person at the right time.”
Using social technologies, we can not only communicate individually with the right person, at the right time, with the right message, but we can also communicate in the right space. Not all of our customers are going to be on Twitter and Facebook, but we can still use some of the marketing technologies we have at hand to build and continue individual conversations.

Social Ecosystem

To build a Real-Time Brand and to fulfill these needs of continuous individual conversations, we have to create a Social Ecosystem. Gone are the days of putting up a corporate site and hope our customers find it. We now need to focus on multi platform, social conversations, real-time search, mobile strategies, CRM or Database Marketing, customer service techniques, infiltrating mass advertising with social aspects (ie QR codes, augmented reality, etc) and so on. Designing this type of conversation strategy and providing relevant information to the individuals participating within our social ecosystem will allow the user to take what is meaningful to them and build a personal conversation with our brand, on their terms, with their preferred communication methods. This type of Social Ecosystem creates, what I call, a malleable brand.

Malleable Brand

By giving the customer the power in the conversation, allowing them to take content and information (rather than having it pushed on to them) will create a level of trust and understanding that traditional marketing could only imagine. Knowing where, how, and why to communicate with customers on their level is the future of what’s to come; creating an even larger definition of Real-Time Branding.

Conclusion

I am a huge advocate of communicating to individuals through marketing. With increases in technologies like Social CRM, database marketing, QR codes and social slimming, we have all the capabilities to become relevant in an individual’s world. By creating and understanding the social ecosystem around each individual, we can build this malleable brand that provides highly relevant content and processes that the consumer can mold into their own personal lifestyle, increasing trust, advocacy and passion.

With this passion, our customers will begin to proudly “wear” our brands as badges and utilize our brand essence to define a certain aspect of their own personality… the pinnacle of any brand.