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Under the hood, Groupon is declining in Boston

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Re: Under the hood, Groupon is declining in Boston

#11

Post by edw »

adam wrote: post #8

I suspect this may be true, but if you're Groupon, you're not just sitting around waiting for the daily deals business model to become more and more saturated, you're hard at work on your "next thing" and your next "big thing." Look already at the flash mob deals they're doing that are location based, the deal they just struck with expedia, the deals with national brands they're starting to do more of. Those are just…

I think the Expedia-Groupon deal bodes very poorly for both companies. Expedia is worried about their core business and is throwing money at Groupon (in the form of subsidizing deals) in order to associate itself with a company that is perceived by many to be up and coming. Groupon gets to look like it's innovating, when all it's doing is taking money from the nerds for the ability to hang out with the cool kids for a while.

Re: Under the hood, Groupon is declining in Boston

#12

Post by jfernandez »

Hisoka wrote: post #4

Having own mailing lists in the past, I can say this is most likely true. Think about it - most deals Groupon sends are not of interest to you. Because of that, you're gonna ignore more and more of their emails, and eventually you're gonna stop opening those emails. The open rate of a Groupon email will just keep decreasing, and as such as the value of a subscriber base is gonna deteriorate.

It seems like they could benefit from offering better filters/subscription methods to their members, e.g. I want to receive only restaurant deals as a simple filter. Sure it'd decrease their overall coverage but it could help retain the value of the emails sent... I think we've all gotten to that ignore point with certain senders.

Re: Under the hood, Groupon is declining in Boston

#13

Post by kmccarth »

vacanti wrote: post #10
kmccarth wrote: post #3

Earlier quoted context omitted.

if you are looking for more detail, definitely read the entire case study (link also in post): http://blog.yipit.com/2011/06/03/groupon-s-1-reveals-busines... reader beware: the case study is a pain to read

Why is it a pain to read? (Always trying to improve our writing)

Take this with a grain of salt (I am no skilled writer myself): I found the organization to be fragmented. Instead of digesting one theme straight through, I found myself having to refocus on each main point. Hope this helps in any fashion

Re: Under the hood, Groupon is declining in Boston

#14

Post by mitjak »

jfernandez wrote: post #12
Hisoka wrote: post #4

Having own mailing lists in the past, I can say this is most likely true. Think about it - most deals Groupon sends are not of interest to you. Because of that, you're gonna ignore more and more of their emails, and eventually you're gonna stop opening those emails. The open rate of a Groupon email will just keep decreasing, and as such as the value of a subscriber base is gonna deteriorate.

It seems like they could benefit from offering better filters/subscription methods to their members, e.g. I want to receive only restaurant deals as a simple filter. Sure it'd decrease their overall coverage but it could help retain the value of the emails sent... I think we've all gotten to that ignore point with certain senders.

Definitely. One can only stand so many spa and skin treatment discounts per week. Then again, I wouldn't imagine hackers to be the main target group for the majority of groupons.

Re: Under the hood, Groupon is declining in Boston

#15

Post by Qz »

mitjak wrote: post #14
jfernandez wrote: post #12

Earlier quoted context omitted.

It seems like they could benefit from offering better filters/subscription methods to their members, e.g. I want to receive only restaurant deals as a simple filter. Sure it'd decrease their overall coverage but it could help retain the value of the emails sent... I think we've all gotten to that ignore point with certain senders.

Definitely. One can only stand so many spa and skin treatment discounts per week. Then again, I wouldn't imagine hackers to be the main target group for the majority of groupons.

I've heard that their main target group is young professional women, which makes the spa/skin stuff a lot more sensible.

Re: Under the hood, Groupon is declining in Boston

#16

Post by firebones »

jfernandez wrote: post #12
Hisoka wrote: post #4

Having own mailing lists in the past, I can say this is most likely true. Think about it - most deals Groupon sends are not of interest to you. Because of that, you're gonna ignore more and more of their emails, and eventually you're gonna stop opening those emails. The open rate of a Groupon email will just keep decreasing, and as such as the value of a subscriber base is gonna deteriorate.

It seems like they could benefit from offering better filters/subscription methods to their members, e.g. I want to receive only restaurant deals as a simple filter. Sure it'd decrease their overall coverage but it could help retain the value of the emails sent... I think we've all gotten to that ignore point with certain senders.

Limitations in inventory (limited by sales force reach, geography and the number of their business clients) will make effective filtering very difficult.

If you think of deals as SKUs, there's a huge granularity mismatch between filtering 50 deals in my geographical area vs. filtering millions of products at Amazon. (Not to mention that it would seem to be very difficult for them to capture much useful data about user preferences to make recommendations or perform proactive filtering.)

Re: Under the hood, Groupon is declining in Boston

#17

Post by waterside81 »

espadagroup wrote: post #7

Groupon is eventually going to have to end up creating a self serve product for business' and send out a daily digest to subscribers of the relevant deals in the area

They already do. Groupon Stores allows businesses to create their own offers that get approved and then scheduled by Groupon.

Re: Under the hood, Groupon is declining in Boston

#18

Post by shii »

arthurgibson wrote: post #6

I'm confused at why the summary of a detailed case study gets upvoted. I think pg needs to adjust voting again.

Don't worry, anything that the hivemind likes for the moment will rocket up, no matter how shitty. Groupon=sucks iz goood, no matter if it's worthless meta.

Re: Under the hood, Groupon is declining in Boston

#19

Post by retube »

Cherian_Abraham wrote: post #9

I cant see their costs coming down anytime soon. Their customer acquisition costs are $1.43 for every $1 spent. And now, with "Real time groupons" launched in Chicago, imagine the amount of deals they will have to line up that would require for them to keep me interested. I dont deny that they are attacking a problem that I do have - "Where should I go out to eat tonight?" and target me with real time deals based on…

Any idea what their rate of client acquisition is given their current sales force of 8,000?

Re: Under the hood, Groupon is declining in Boston

#20

Post by r00fus »

Cherian_Abraham wrote: post #9

I cant see their costs coming down anytime soon. Their customer acquisition costs are $1.43 for every $1 spent. And now, with "Real time groupons" launched in Chicago, imagine the amount of deals they will have to line up that would require for them to keep me interested. I dont deny that they are attacking a problem that I do have - "Where should I go out to eat tonight?" and target me with real time deals based on…

The sad thing is that with Google's backing, they would have had immense resources to eat FourSquare, LivingSocial, and Facebook's lunch for these kind of local advertisements.

To me, Groupon's leadership were idiots for passing up the Google $6B buyout... and it will be readily apparent to everyone in a few months.

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