I’ve never gotten around to trying group buying/deal sites until once recently, though I always thought that they were fulfilling a need for businesses and consumers. But when I read this ‘peculiar’ story titled Groupon’s Success Disaster, I found myself identifying with it (from a consumer perspective, we’ll get to that in a bit) and since the number of group buying sites in India is only a few numbers lesser than the number of social media consultants, I thought it made sense to spare a few thoughts on it.
The (linked above) story is of a small business owner, who, after 3 months of using Groupon, discovered that the deals were hurting the business financially and then had to take $8000 out of savings to cover payroll. Considering that, I thought the Groupon reply has quite a cruel title – ‘Too much of a good thing‘, but it is well drafted.
The win-win for business-consumer in this is because it gives the former a chance to spread the word on the service and probably get some feedback on it and the latter mostly gets a good deal. Like I mentioned, I used a site recently for what seemed like a good deal. Though the deal process was painless, I ended up spending more money than what I normally would, thanks to a mis-communication (and some carelessness on my part). It means that I won’t be a repeat customer. It ends up as a lose-lose. Now this is probably the exception to how it usually happens, but…
It did make me think whether the business owners get into deals with a strategy in place. Not just in terms of finance, but also in terms of their expectations of buzz, their delivery capability as well as how they’d manage to make the customer return. When it is kept in mind that social platforms and deal sites are mostly interwoven, I think it’d make sense for the business to use their service delivery (assumed good) and connect it to their social presence. A “We hope you liked it. Here’s an x% discount for your next visit and we would really appreciate it if you could leave your comments on FB/Twitter” approach. Facebook would especially help the business to spread the word beyond the usual early adopter set. While on retail, its difficult not to mention Foursquare. Though I’d love it if Foursquare aggregated the deals themselves, the businesses definitely can get active on Foursquare and push their deals to users nearby.
With the (limited) examples I’ve seen, I doubt whether this is being done. So it reminds me of a lot of advertising, and most social media efforts. The former because the message and the product/service are rarely (generalising) in sync, and the latter because of the lack of strategy and the herd mentality.
until next time, regroup!