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/

Introducing failin.gs: a new online community where everyone you know – from your mother to your boss to that girl that would never go on a date with you in college – can post what they think of you…anonymously.  In the era of online communities and social networking, there’s no longer a reason to write it on the bathroom wall.  Just post it on their failin.gs page for the world to agree or disagree with.

While I don’t really like anonymity in online review sites and forums, it is really the only way that failin.gs could be successful.  A close friend isn’t going to be honest and tell you that they think your breath smells like the bottom of a foot or you should hit the gym a few more hours a week if they have to have their name attached to it.   But the anonymity of it all, especially for the younger generation of internet users, can be kind of concerning.  Online bullying anyone (maybe there should be an age limit)?   Or how about the paranoia associated with knowing that it could have been one of my close friends that said I have an ego the size of Texas?

I’m also curious as to the types of sponsorships and advertising that will end up on the site if it proves to be successful in attracting new users.  A perfect place for a therapist to advertise?  Maybe a personal trainer or an acne medication line of products?  Some could call that immoral and wrong – hitting people while they’re down.  My media background might be inclined to call it really effective targeting.  If the site takes off, I would expect to see both sides of the argument.

After discovering failin.gs this morning, my curiosity was piqued.  Should I be the guinea pig of my own social experiment to find out just what people think about me?  Wait?  I thought I didn’t care?  But wouldn’t it be interesting to find out?  I guess I’ll think about it.  In the meantime, keep an eye out to see if your friends start posting links to their Facebook profiles and Twitter feeds.  Then let ‘em have it (as constructively and nicely as possible, of course).

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.

http://www.predictablyirrational.com/?p=704

http://autocompleteme.com/

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