Professional Documents
Culture Documents
Is Groupon Right For Your Business - From Paul Cubbon For Think! VCM Webinar March 2011
Is Groupon Right For Your Business - From Paul Cubbon For Think! VCM Webinar March 2011
W W W .THINKSOCIALMEDIA. COM
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IF Groupon customer is a NEW customer she could: Return to buy at full price; Only return when deep discounts are offered; Influence other consumers, positive/negative Impact staff morale, positive/negative Impact customer service, positive/negative Think Lifetime Customer Value in different scenarios
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Academic study 1
Harvard: Is Groupon good for retailers? Jan 10th 2011 Working paper: To Groupon or not to Groupon? http://www.hbs.edu/research/pdf/11-063.pdf Key themes
Price discrimination Advertising benefit
Academic Study 2
Rice University, Fall 2010 150 Groupon businesses in 19 cities (6/09-8/10) 66% profitable; 32% unprofitable.
Restaurants were the most unprofitable category, describing Groupon customers as "entitled," poor tippers, and definitely not repeat customers. Spas, on the other hand, were the most profitable (though their Groupon-using customers were still bad tippers). 42% said they would not use Groupon again
Living Social
Competition
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Jan 19th 2011: Living Social Sells >1 million Amazon coupons: $13m+
Like Gap Groupon
A national, mass advertising play For Amazon, a $15 discount off of normal basket.
Swarmjam
More competitors. Barriers to entry?
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eConsultancy view
Group buying and the new customer acquisition lie Jan 20th 2011
eConsultancy cont.
Patricia Robles:
7/5/2011
What are the long-term as well as short-term implications? Will deep discounting be the new norm in your category? Can you WIN with this tool? Will you start a price war?
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The last scenario is what you should be trying to achieve with any price discounting. But for it to work, your core offering, the brand experience and perceived benefit has to superior to the next discounting competitor.
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Takeaways
What is your marketing strategy? Where does price discounting fit into this? (if at all.) Work through margin as well as revenue implications. Look at longer-term as well as short-term:
Financial brand
If you decide to price-discount, is Groupon (or a similar aggregator) your best choice?
Q&A
Questions? Comments?
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