Watch Out Groupon, Your Fifteen Minutes May Be Nearly Over

By
gsteen
– May 3, 2011Posted in: Daily Trends, Social

Watch Out Groupon, Your Fifteen Minutes May Be Nearly Over

thruSocial

Groupon has attracted a lot of attention and inspired many copycat entrepreneurs, but a former Facebook employee is attempting to revolutionize the daily deals market by creating a company in a new mold. thruSocial will allow businesses to create their own deals with a self-serve web interface and pay a flat monthly rate of $35 rather than handing over a sizable percentage of each sale. Digital coupons are sent to the Facebook fans and Twitter followers of the client; the coupons drive back to thruPon.com, where the user can find additional deals.

Implications: Groupon rode a wave of small business participation into the spotlight, but they have had less success adapting their business model to meet the needs of big brands. thruSocial could succeed in this area by offering franchised brands a bottom-up solution for daily deals distribution and redemption. By allowing each location to manage their own offers at a low cost, thruSocial will put the power in the hands of those on the ground floor, allowing them the flexibility they need to make these efforts profitable.

Cultural Macrotrend: Dollars and Sense

via GIGAOM

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  • Andrew

    Companies should be wary about the impact coupon programs have on their brand. Look to department stores for an example of what can happen when discount strategies get the emphasis rather than true brand development. Groupon works because the unpredictable coupon rotation prevents customer behavior from adaptation (that is, customers don’t know when the next coupon for a business is coming up, so they can’t plan their next visit based on that future discount). If your most loyal customers are those that come as a result of discounts (as a “subscription” like the one above would create), will the stop coming if those discounts go away?

  • gsteen

    Good points Andrew! Some fast food chains have created similar problems for themselves by training customers to expect discounts at certain times of the year – people learn to wait and frequent the chain during those seasons.

  • Fred Endicott

    In no case are more than 20% of customers seasonal. Most buy for other reasons, when they need things. Smart shoppers will always buy just after Christmas when unsold inventory is marked down. It hardly pays to offer Groupon offers during that time unless you’re a mall restaurant near the shopping. Irregular and unpredictable is good to dissuade freeloaders, but it shouldn’t be the first concern. Do a promotion whenever you need a boost in foot traffic. It’s as simple as that.

  • gsteen

    Good points Fred! I suppose it does depend on what your goal is; is more traffic in the short term the ultimate goal or are you hoping to incite trial with new customers with long term relationships as the ultimate payoff?

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