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Who are we putting in charge of our business?

 

As I watched this video of Groupon’s CEO Andrew Mason apologizing for a business in Japan that couldn’t handle the orders that Groupon generated for them over New Years I couldn’t stop thinking; Video Click Here

“Here is a vendor that set a marketing strategy in place for a business using price positioning and email executed on it and then when the business wasn’t prepared to deliver, HE’S apologizing to HIS customers for it?” A nobal gesture.

 

This is amazing these businesses that work with Groupon have virtually no margin in what they sell through that channel, they are told what they need to price or discount their services at to work with Groupon and all the while making the customer more and more loyal to Groupon, Yes Groupon looks at the customers at their customers not the businesses customers…

 

How did Groupon get their customers?

Do they have a product to sell?

 

NO they got those customers on the backs of the business they convinced to deeply discount their product to get Groupon the loyalty they have at the businesses cost not Groupon in fact Groupon got paid to do it.

 

HMMM who does that sound like in the Retail Auto Industry?

 

Wake up dealers take charge of your own marketing or you’re going to end up like these small business sheep that follow Groupon to the slaughter.

 

Think about it...

 

Larry Bruce @pcmguy

www.pcmguy.com

Views: 12

Tags: CRM, Post-click-marketing, automotive, bruce, click, dealership, internet, larry, marketing, post, More…sales, sem, seo, site, web

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Comment by Keith Shetterly on January 17, 2011 at 12:07pm

AHHHHHHHHHHHH.  Now, I comprehend Larry!

 

100% agree with you, sorry.  I did miss your point.  I'm on your team for this one, definitely--the middlemen pushing this model to dealerships are the carpetbaggers of the new century.  And dealers don't need any more help from someone crushing the dealers' margins while lining their own pockets.

Comment by Larry Bruce on January 17, 2011 at 11:30am

Keith I understand what you are saying but I think you are missing my point, or maybe I didn't make it clear enough.

 

In either case the point is that Groupon doesnt have customers or a product to sell, they have an email database. That email database was built from convincing businesses to deeply discount thier services in many cases at a loss to the business, then they did a masterful job of getting the recipient to share the coupon and BOUGHT not GREW a cult following on the backs of the very businesses they convinced to lose money to sell their product.

 

There are intenities in the Auto space working on this same model. Convincing car dealers to price cars cheaper and cheaper so that they can be viewed as the place to go for a cheap car. In the end this is a race to the bottom and the only loser is the dealer.

Comment by Keith Shetterly on January 17, 2011 at 9:26am

I don't agree that Groupon is leading folks to slaughter.  Groupon is an advertising expense.  If you treat it as a sales generator on the first generation of effort with these customers, you are using it wrong.

 

A business can run coupons in the newspaper for $5000 and hope to get new business, or they can spend $2500 when new folks show up from Groupon.  Yes, Groupon got paid by the consumer, say, $15, and the business gives up, say, $40 coupon to the consumer at the sale.  At this point, the business has a new customer to market to AND has chance to upsell them, to boot.  Regardless, out of the pool of arrivals you aim to get a lot of new customers.  Hence, it works best for consummables and entertainment.

 

Groupon is just not a sales generator.  It's a new customer generator.  You have to be able to capitalize on that, just as you would coupons from the newspaper that lose you money.  And don't always work.

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