February 23, 2011 at 2:37 pm
Yesterday I got spammed by Shoppybag. Becareful everybody, they access your Gmail account and before you know it they start to invite all of your contacts. We like to think of our friends as valuable relationships, so Shoppybag may expand rather quickly and virally with this spam technique, they really missed the point.
2010 set the stage for the daily offers. Many local clones have emerged and as Groupon fights to get into China, I have become a very active user of Groupon deals at a local level; hyper local and hyper personal in my cities of Vancouver, BC and Brooklyn, NY. My wife purchased 2 different Groupons for one of our favorite restaurants, and what I found interesting is that I found myself looking for Groupon’s of places I actually already go to and spend money at. So what is the value to that restaurant if I would be going there anyway? As we left the restaurant, we felt bit bad to get such a discount that we left a very large tip for the waitress. What I did realize was that in both cases of using the Groupon, we actually brought a friend to the restaurant. The value of making a new introduction and getting the word out clearly has over and beyond marketing value even though the restaurant lost 50% 2x for our visits.
So in my mind the real social element of not dealing with strangers that seems to be a strong point in the overall Groupon process, but to somehow bring friends into the equation is the best means of growing these social coupons in the future. How can you not only get a discount, but influence others that normally would not have been introduced to that product or service find a way to bring it to their attention.
I started to advise for a company called WANTLET. What I like about their solution is that they are more focused on the Want Lists and the social graph of getting more and more involvement from your community rather then just focusing on the deals only. They have been partnering with many of the coupon companies and aggregators, but they bring a unique value proposition of enlarging the marketing scope via social and viral introductions.
They are not at all competitive to Groupon, but they offer an alternative to social marketing platform that is something I find extremely powerful in the overall sales funnel process.
I think making the friend process more controlled and part of a users desire to spread the word is something that needs to be treated with the utmost of care.
Wantlet brings a unique new way to market; Social Want-Advertising. Targeting users when they WANT to be marketed to rather then bringing automatic techniques to try to hit them in the face. I think this also speaks to the article I cited below.
The Way to Beat Groupon
Article shared by Terrance Jackson, se7en-mag.com Feb 22, 2011
Groupon, the daily deals website, has been labeled by Forbes
as the fastest growing company ever. The foundation of the company’s success is its founder’s very sincere attempt at social activism. Andrew Mason, the founder and CEO of Groupon, was looking to change the world by making it easier for people to come together for social causes with a website called The Point.
Examine many of the most successful technology companies, such as Microsoft, Apple, Google, Facebook and now Groupon, and you will find that in the beginning the founders had no real understanding of how their companies would make money. What they did have was a burning passion to change the world. So, are you sincerely trying to change the world or are you just trying to show everyone how clever you are?
Groupon is growing at a rate much faster than any of these other highly successful companies, yet with far less technical innovation. How can this be? One very important reason is that in their efforts to change the world with The Point, they stumble on to something mind-blowing: the collective power of small businesses. This collective power comes much closer to the vision of Adam Smith presented in The Wealth of Nations than the form of capitalism that developed during the 20th Century.
Yet, no small business will be continually viable by using daily deals websites as its main source of marketing. So, the lesson that needs to be taken away from the success of Groupon is that there is still plenty of room to grow for the next company that stumbles on to the next great way to help small businesses. And that next great way will come from great service not from technical innovation. Groupon is not very technically innovative, this is why there are so many clones. It just provides a great service.
Overwhelming clutter has made traditional advertising almost worthless for most businesses. We live in a world that has become ad rich but idea poor. Customers don’t want to be bombarded with ads—they want to be inspired by ideas that will change their lives. This brings us to another reason why Groupon is so successful, it changes people’s lives by giving them new experiences. Ads may create transactions, but great ideas create transformations. Ads reflect our culture, ideas imagine our future.
The ability to develop better ideas than your competition is the only sustainable competitive advantage you can have. The age of the big thinker has finally come—an era where the profits go to the prophets.
The old model of advertising and branding was to improve public perceptions. The new model demands that your company improve public life. To survive, your company must start nurturing ideas, not just pushing products and services.
Knowledgeable marketers understand that what worked in the past is not working (or not working well) now. A new approach is needed. As A. G. Lafley, the former CEO of Procter & Gamble and author of The Game Changer, told his executives, “We need to reinvent the way we market to consumers. We need a new model.”
The proliferation of new media, escalating competitive pressures, and the emergence of alternate marketing disciplines has transformed the advertising and marketing industry. If you wish to survive in this uncertain future, you better anticipate the upcoming challenges and find ways to overcome them. Increasingly, there are only two kinds of companies: brave and dead. What kind of company are you in?
One major challenge is that the current television business model is broken. One prime example of this broken model is that more than 80% of PVR users report they skip commercials. In fact, a study by Deutsche Bank found that only 18 percent of television-advertising campaigns actually generate a positive return on the investment.
In response to this ever changing market environment, the way forward is to develop new models for local marketing and advertising. Consider offering integrated services that may include direct mail, daily deals, database marketing, Internet, email, event promotions, public relations, and sponsorships. Finding the right mix of services not technical innovation will be the key to the way of beating Groupon. Some of my own thoughts about stumbling around to find the way to beat Groupon are at www.LocalGreenMag.com
. Good luck at finding your own way.