Here are the 4 goliaths, but let’s not forget about the smaller, tightly focused niche sites that cater to moms, wine-lovers, GLBT, offices, mobile users, foodies, etc.
via @mashable
Bloomspot has solved merchants’ biggest problem: profitability!
Plus, it involves nice rewards for customers. So can everyone be happy now?
Bloomspot’s new program, called Bloomspot PRIME, was developed to track customer spending beyond the initial voucher. It also serves a tool to incentivize members to buy more from its merchants. For each additional dollar spent, Bloomspot rewards the customer with 20% in Bloomspot credit. Sweet!
Apparently, this is working quite well as you can see in this anonymized merchant dashboard Bloomspot sent me today:
When customers are rewarded and their purchases are tracked, we would expect more profits for merchants. Okay, so not all merchants are created equal, but it comes back to the point I keep harping on: the key for merchants is to turn new customers into repeat customers by being AWESOME.
On average, Bloomspot members are now spending 2.6 times more than the certificate. For restaurants, that’s about $90 above the certificate, with tips around 20%. For spas and salons, average member spends a whopping $139 above the certificate, tipping around 20%.
Bloomspot’s demographic is reportedly more educated (over 75% hold college degrees, compared with less than 50% for both Groupon and LivingSocial) and more affluent (over twice as many with household income over $100k as Groupon and LivingSocial—source: RapLeaf). Plus the average pricepoint of Bloomspot deals is above $75, over double that of other sites.
With all that in mind, I see good things ahead for Bloomspot. What member doesn’t love rewards? And what business doesn’t love better ROI?
Groupon And Living Social Are “Gorillas Among Ants” via @alleyinsider
I’d love to see what’s really happening down there among those “ants”. Who’s really in third place?
Read more: http://www.businessinsider.com/chart-of-the-day-daily-deals-sites-unique-visitors-groupon-livingsocial-competitors-2011-6#ixzz1PCV9SVqG
Infographic!
2010 was a banner year for e-commerce plus we gained f-, m-, and s-commerce. (Infographic via @marsattacks)
![Groupon takes a nosedive on revenue. Some say it’s due to post-Super Bowl fallout. Others think it’s Living Social creeping up on them. I think it’s both, plus Tippr, and New York Times, and other publishers stepping onto the deep discount dance floor.
The question is: can one player possibly hold everyone’s attention?
[Image credit: SocialTimes]](http://24.media.tumblr.com/tumblr_limpalRLcX1qg1oj8o1_1280.jpg)
Groupon takes a nosedive on revenue. Some say it’s due to post-Super Bowl fallout. Others think it’s Living Social creeping up on them. I think it’s both, plus Tippr, and New York Times, and other publishers stepping onto the deep discount dance floor.
The question is: can one player possibly hold everyone’s attention?
[Image credit: SocialTimes]
Can Facebook Compete with Groupon for Group Deals?
Facebook announced plans this week to create a group deals feature for its social network of nearly 600 million users. People will be able to share deals with their friends, similar to Groupon and Living Social’s social sharing features.
But as a marketer, it raises a few questions.
- How effective are the social sharing features of Groupon and Living Social? Have you ever shared a deal? I haven’t. By the time I get to it, the deal has already tipped.
- Do people want to buy things on Facebook? There seem to be two camps. Marketers say Yes, and non-marketers say… Maybe.
- How will they integrate with their current Deals program? Can they successfully tie this to a physical business or check-in?
Let’s just assume Facebook rolls out group deals, and people share and buy them. With all the social data Facebook owns (ie, likes and interests on 600 million people), this concept will ROCK!
I’d like to know what you think.
SMBs: Do Groupon sales wreak havoc on your web analytics, too?
In a previous post, I wrote about how Groupon wreaks havoc on SEM. I can now add web analytics to that list.
How so? Groupon gets people interested in your brand. Lots of people. First, they see the deal on Groupon. Next they open a new tab (usually) and check out your site. But they won’t purchase while they’re there. Instead, they do their purchasing on Groupon’s site, which throws off many of your reports, including Visits to Purchase (a canned report found inside Google Analytics).
The same goes for Days to Purchase reports. This report shows how many transactions occurred within 1 day, 2 days, 3 days, etc., of first visiting your site. When offered such deep discounts, Groupon buyers have less incentive to redeem right away.
Speaking of redeeming, what’s the going rate for Groupon-deal redemption? 80% or thereabouts, right? Just another way Groupon messes with your web transaction reports.
There may be a solution to this problem: segment your visitors. Just create a custom segment where you can examine all visitors that did NOT come from the referring site www.groupon.com. That should work perfectly, right?
Wrong! Remember from my previous posts many Grouponers are intent on opening a new tab, searching your brand, and clicking your PPC ad? I am afraid there is no way to filter out Grouponers, or at least I haven’t found one yet. Thoughts?
Groupon’s mighty INFLUENCE: 6 reasons for its success
First off, I am a big fan of Groupon. As a consumer, I have cashed in on a handful of deals like half off Fine Wines, Family Day at the Zoo, 2 for 1 Ice Cream, etc. And as a marketer, I have managed to arrange a few deals, too, such as discounts on Custom Apparel, half off Salon Blowouts, Personal Coaching, etc.
But in spite of the utility it has brought me, I am still astounded at how quickly Groupon became the fastest growing company in history! Much credit goes to CEO Andrew Mason who drew on key insights from his previous experience with The Point, Groupon’s predecessor. But what did Mason do differently with Groupon that seems to have caught on so fast for so many people?
I am also a big fan of psychologist Dr. Robert Cialdini, founder of Influence At Work, a professional resource to improve organizational and personal performance. In his landmark sales and marketing book, “Influence: The Psychology of Persuasion,” Cialdini has outlined six key principles of persuasion that move us to buy into things. Every marketer needs this book. (Plus, there is a picture of ME on page 287!)
I always find it quite helpful to peer through “a Cialdini lens” when analyzing WHY campaigns are successful or not. Was there enough influence in the message? Was the offer compelling? Did the marketers understand the audience well and would that audience be moved to buy?
Below is my analysis of Groupon—through a Cialdini lens—and how I think the six principles of persuasion have contributed to its success.
1. The principle of commitment and consistency: when people commit to something, they tend to follow through in ways that are consistent with their original commitment.
Groupon cashes in on this principle in two ways. #1: After you buy a 50% off deal, you are more likely to buy another 50% off deal in the future because you’re already committed to the act of saving. This clearly helps Groupon land repeat customers. #2: After you buy a brand’s deal, you are more likely to follow through, redeem the offer and possibly even become a repeat customer for that brand. This not only helps brands but also helps Groupon, as brands love overnight success and seek to repeat this success.
2. The principle of liking: people tend to say yes to something they like.
Groupon deals are cleverly written. In fact Andrew Mason (CEO) invests heavily in talented copywriters, believing a great pitch makes all the difference. Below is an excerpt from a deal with a popular clothing retailer. What’s not to like about this?
Like underground kickboxing, finding the perfect ensemble requires flexible limbs, a balanced knowledge of styles, and a willingness to go shirtless in compact, windowless rooms. Attack the shelves with today’s Groupon.
If you make yourself likable, people will like you right back. In this case, they will like your offer, and buy. (An aside: I bet it was an easy decision when Facebook chose the language “Like” over “Share”.)
3. The principle of social proof: one way to determine if something is correct is to find out what others believe to be correct.
In e-commerce, one way to determine if a deal is worth buying is to see if other people have bought it. (Operative word in that last sentence = see.) This picture says it all:
A visceral feeling takes place when you see that graphic. I know, because I have felt it myself. Are those sales number up to date? for real? Hit Refresh. Yes they are!
4. The principle of reciprocity: one person will seek to repay what another person has provided for free.
Probably the most powerful of all six, this principle has been ingrained in all of us since early childhood. We cannot help ourselves to say yes to something after we are given something for free. I see this happening in two ways on Groupon. #1: A 50%, 60%, or 70% off deal was unheard of. It was almost like receiving free money. If a web site can turn transactions fast, then free money = sales (and lots of them). #2: Free money warrants the need to repay the difference, so we enlist our friends: “Dude, you gotta get in on this! It’s too good to be true!” Hit Share.
5. The principle of scarcity: opportunities seem more valuable when they are less available.
Ever wondered why you see “For a Limited Time” used much? That’s because it works. Groupon built their model on “One Deal a Day”; if you miss it or catch it too late, bummer. We’re also starting to see web sites with countdown timers that change in real time right before your eyes fancy browser code called AJAX. We react by buying.
6. The principle of authority: establish your credibility as an expert and people will come flocking.
Forbes.com said it best when they named Groupon the fastest growing company in history. Every small business I know wants to be featured on Groupon, and every person I know wants to cash in on great savings. But with all the Groupon clones out there, why not shop around in search of other great deals? Simply by being the first, the best, and the biggest, Groupon sealed their status as the ultimate authority on group buying. Can they hold on and maintain this coveted position? Time will tell. But as entrepreneur/investor Josh Felser recently tweeted, he is being forced to take a stance on the odds that the next Groupon clone can beat Groupon (and Living Social, the second biggest deal site as of this writing).
Did you enjoy this article? If so, please share it!
Special thanks to Brian Ahearn, a certified Persuasion Practitioner, for his insights and feedback.
#Groupon users (#Grouponers) can wreak havoc on your #SEM.
Nothing against Groupon, but the behavior of its users can be a little… costly!
Typically, the Grouponer:
- Checks out your deal
- Conducts a search on your brand
- Clicks your paid ad in position #1
- Likes what she sees
- Heads back to buy the deal
How This Affects SEM
The last click gets credit for the sale. In this case, that’s your paid ad. Cool, right? Not so fast! That cost you a click. Not cool. Plus, your CPA on the sale will be a few bucks, which might just wipe out your margins on the Groupon deal. This has done repeatedly for my client.
Granted, this really only becomes a problem when you’re running multiple deals throughout the country, but I see a trend moving away from local deals to national deals, and marketers need to be aware of the potential negative effects on search campaigns.
How to Solve This Problem
One solution: Just ask your Grouponer to click the link that is embedded in the deal, you’d have saved several bucks per sale. Put it clearly in the deal copy. This will be huge!
Another solution: Pause paid ads for your brand. Hmmm. Sound risky? It sure is.
