Don’t you love a good info-graphic? Here’s one close to my heart on the adoption of digital coupons.
An Info-graphic on the Rise of Online Coupons
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Reasons Why People Follow Brands
Here’s a great info graphic by Get Satisfaction on the reasons people follow brands. Interesting that most people that follow brands are either your current customers or people that want a deal from you! Given the rate of sharing and following brands is still low, businesses could benefit from targeting social media strategies that engage with and reward loyal customers.
Sean Parker, MySpace and Groupon
Today MySpace has finally been sold for $US35 million. Like a fireworks display MySpace caught every body’s attention with peaks at 200 million users (compared with an estimated 30 million now) and a sale for $550 million to NewsCorp in 2005.
In an interview at NExTWORK, Sean Parker accounts for the MySpace decline in part due to the bad design and the fact that the user experience on MySpace was ‘fraudulent’ and ‘virtual’. According to Parker, “people (with profiles) were putting their best foot forward living in a fantasy world of their own construction” and the virtual self on MySpace did not accurately represent the real self. Facebook as a smaller player at the time won because the experience and people’s identity was more real.
In the same interview I was interested in Parker’s views on product suggesting that you don’t want people using your product because it’s ‘cool’, because then it’s a fad, and that what you want is “people using your product because it’s a part of their life and they can’t stop using it”.
Listening to Parker made me think about another more recent company that has captured attention in 2011 due to its phenomenal growth and promise…
So is Groupon different to MySpace?
- MySpace design issues meant that Facebook could beat them with a better product. Do the design issues of the Groupon business leave them exposed to competitors with better design? By design I’m referring to business trading terms, ease of competition, loyalty concerns, sustainability of deep discounts and margins.
- Do people (including businesses) use Groupons because it’s cool or because it’s part of their life and they can’t stop using it.
My view is that the Groupon model fails on both of these questions.
By design Groupon relies heavily on a large and expensive sales force to attract businesses, and marketing spend to attract more users to their network. They also rely on significant margins from deals sold of up to 50% and let’s not forget about the loyalty to their brand.
The problem is Groupon has competitors in every market and the result is, the cost to acquire a new customer is increasing rapidly, it’s getting more expensive to attract businesses with new deals, and their margins for each deal are being reduced. Studies are also raising questions around business loyalty with less than half of businesses that run daily deals saying they would run another daily deal and of those remaining, the majority of businesses would be open to promoting on ‘many’ daily deal sites. There are also issues around consumer loyalty with migration of some customers to deal aggregator sites indicating the loyalty is to the deal on offer at that time, as opposed to the daily deal network.
Todays sale of MySpace would have been hard to believe back in 2005. There are things that they could have changed back then that would have seen them maintain their position as the leading Social Network. My view is that Groupon are in a similar position and their future will depend on their ability to adapt to the current challenges with the design of their business model…their ability to provide something that businesses and users can’t live without.
Is Social Media Sharing for Small Business Working?
There is a whole suite of tools on the Internet that help you share content via social media. The best-known examples are the Facebook ‘like’ or ‘share’ button, Twitter ‘follow’ or ‘tweet’ button and the Google +1 recommendation button. These are all great for sharing content and they work particularly well for publishers.
Personally, I regularly share through Facebook, LinkedIn and Twitter. But what am I sharing?…usually it’s information about (1) my company blog, (2) news articles that interest me or (3) videos and music that interest me. Reinforcing the value sharing has to publishers all you need to do is look at the sharing options on any article on Techcrunch, Mashable, HuffingtonPost or other mainstream news sites. It’s a slam dunk, sharing on content sites is brilliant stuff!
Sharing options as seen on most news and publishing websites.
But How Effective are Sharing Options for Businesses?
It got me thinking about the effectiveness of these share options for businesses. As a consumer when was the last time you clicked on an option to share or recommend a service?
Sharing or recommending a business usually puts a number alongside the share button to indicate how many people have shared that content, but browsing through Yellow Pages or any other online directory you will struggle to find business listings that have had anyone share, tweet or like small businesses.
Sharing options as seen on most business listings.
My feeling is that most businesses have implemented some form of sharing button because everyone else is doing it, and it can’t hurt! But, if the objective is to help your business and engage with people who visit your website or directory listing then perhaps it’s failing.
Why would a customer click on a share button on your business page? What possible motivation do they have to ‘like’ your business? How do you meaningfully engage with customers visiting your website?
Would love your feedback if you run a small business and have used social media sharing options here.
Mobile Web on The March
A new study in the US has found that use of the Mobile Web has overtaken desktop internet usage. Businesses not thinking about mobile web need to get on board fast. Some revealing stats courtesy of Flurry.
![Consumers Now Spending More Time on Mobile Apps Than the Web [STUDY]](https://img.skitch.com/20110622-m3hc7hwmee27rm1wr61b1nsg7i.medium.jpg)
How Businesses Fare With Daily Deals
Some new research by Utpal Dholakia from Rice University has some interesting findings in relation to Daily Deals when comparing Groupon, Living Social and competitors in the US. Based on a study of 324 businesses that have used daily deals since August 2009, the report released on 13 June makes the following conclusions:
- There is little differentiation between daily deal sites making it difficult for any of them to stand out from the others.
- Loyalty by customers using daily deals is poor with 35.9% spending beyond the deal and only 19.9% returning.
- Less than 50% of businesses in the study were likely to do a daily deal again. The number of restaurants , bars and salons being well below that number.
- Almost 3/4 of the businesses would consider promoting with a different daily deal provider.
The author concludes that over the next couple of years deal providers will need to settle for lower margins and cost of acquisition will also increase. To see the full report click here.
The Future of Mobile Web
In my opinion, Mobile Internet is the most dramatic shift in computing since the 1970′s. I remember designing a coupons app for the mobile in early 2008 and was limited in so many ways. Hard to believe how far the mobile internet has shifted in this time thanks to the iPhone, Android and Symbion. See how Smartphone devices and applications are changing the world with this video that Tracy Goh put together.
Mobile Apps are the Future of Search
Today it was reported that Yelp.com have one-tenth the number of users on their Mobile apps compared with their Web site but 33% of the actual searches on Yelp originate from its mobile apps. In other words, the Yelp app is a lot more engaging for users.
The combination of location and content relevance is a potent mix when it comes to search and these recent reports provide good evidence that mobile apps are the future when it comes to search.
Web2Expo: Gamification
For me the most useful sessions at Web2Expo in San Francisco have been around the topic of Gamification.
Gamification relates to the emerging use of ’game play’ in business systems. A really interesting area that is driving the rewards and business models of successful online and mobile companies. It’s not just the collection of ‘badges’ as in Foursquare, but to do with the process you use to engage with your customers the moment they interact with your business or service.
Gabe Zichermann was one of my highlights and he spoke about how game thinking is used to motivate users, solve problems and engage. Some of his game tips are as follows:
- Everything in gamification should be by design, nothing to chance.
- The first 60 seconds on your website is the most important, so make it a tightly scripted experience. This goes to the question ‘What is the one thing you want people to do on your page?’
- Once the user performs the first action with success, give them another action followed by another success message and make them doing what you need/want them to do fun.
Loved the talk and if you are interested in the topic take a look at Gabe’s website.
The Future of Deals: Location and Relevance
One of the biggest issues with deals sites is the question of relevance. We are starting to see sites like ‘Allthedeals’ that aggregate offers from other deal sites like Cudo, Scoopon, Spreets et al gain more and more popularity because they give the user choice of deals from more locations. In a crowded market where deals sites have little differentiation, aggregators like ‘Allthedeals’ are showing that loyalty is to the deal and not to the ‘deal site’. The ability then to deliver relevant deals is becoming more and more important for the survival of deals sites.
In my view, none of the existing solutions go far enough. Groupon are the best placed internationally in addressing this issue with their new “I’m Hungry” and “I’m Bored” location based app that will find deals near to you from next month. But, the Groupon approach still only shows you what they have on their list and this is not necessarily what you want. My approach with CrowdSauce is to let people ask for deals from any business (Slade Sherman on CrowdSauce in The Australian) and we are attempting to address both location and relevance with our new app.
It’s going to be an interesting 12 months in the Deals space and the emergence of location aware applications is exciting with reports that one half of web-based location searches are already being done using mobile phones.