I think coupons are bad for selling items, but I think it can really help during down times for the service industry.

I think too much coupon is bad, but a one or two week promotion every quarter seems like a good boost.

Apparently as the business grows we become a mere statistic. Even in this “social media” era.

Great post. It’s my belief that no business that has it’s act together in search marketing, social media and other areas would ever take a Groupon sales call seriously as they would not need it.

The real question is why didn’t what is left of the business press scrutinize the economics of Groupon for a business in relation to other more cost effective marketing methods that bring relevant customers? (instead of glorifying the company)

On the “everyday low prices” point, I think there is a fascinating analogy to the tax breaks that localities give new businesses to move there. Very high overhead, all the work the locality does to attract the businesses, and the lobbying effort the businesses go to to attract the breaks. I have always thought it was much better to keep taxes low for everybody, instead of offering big breaks to induce companies to relocate, in a zero-sum game. It is a basic application of the old rule that it costs 10X as much, in marketing efforts, to attract a new customer, as it does to simply retain an existing customer. (Yes of course I am all-too-aware of the political calculus that makes this infeasible–the voters are unlikely to see it that way.)

It wasn’t quite random, except in the way we experienced it. This was Europe’s high-end retailing conference, and both Lee Scot and I were keynote speakers. The reason he was a stranger to me at first was that I had not looked at the speakers list (or even the agenda) at the time we first met, since all my time spent before then went into prepping for giving the opening talk the night before. I also didn’t know who the CEO of Wal-Mart was in the first place, or what he looked like. As it happened, neither did Lee Scott want anybody to know. As he put it in his talk, and to us personally later, the ghost of Sam Walton will always be the company’s CEO and guiding force. In his whole tenure as CEO, I think he gave exactly one interview and always avoided the spotlight. He even talked about how many Wal-Mart lunch meetings, even at his level, happened at local fast-food restaurants.

In respect to your points and Chris’s, there are good and bad ways to manage coupon promotions over time, and in some cases they can serve the cause of loyalty and repeat business. But, as my wife (who is far wiser than I on these matters) also points out, it’s easy and dangerous to discount your way to success. Relationship and discounting will always be strange bedfellows, unless all you have to offer are quickies. That’s was Lee Scott’s point about K-Mart.

Regarding Groupon: they have been adamant to say that their job is to tell a well crafted story, at a human scale and that Rosie’s case is both isolated, and precisely what they are paying a lot of rep to be sure to avoid — so you certainly are right about raw discounts being ineffective, but maybe wrong about condemning Groupon.

I don’t think offering 50% off after the third buy a week apart is any more human than 50% off the first one: both rely on rather invasive tracking that is generally not meant to empower buyers; on the bright side, both are pretext to have the customer make sense of what your business is, or rather, who you are. There is more curiosity the first time, as pointed out by Groupon’s enthusiastic ideal merchant, and there certainly is more courage the third with the opportunity of saying “Last time I came, there were those pineapples…” but what is important is to point out: those are pretext.

What is wrong is an employee responding “There is nothing I can do about that”, be it about an expired coupon or a discontinued product. Rosie’s very humane blog post will probably drive a lot of people in, and justify all the expense.

In many ways, businesses are learning old lessons again. Being social in the off-line world was a necessity for customer-facing businesses. Being unsocial was a sure of loosing your job. Or your business.

Social media/networking should provide businesses with an even more scalable way of being social rather than an excuse to make mechanical, sterilized and inauthentic conversations.

On another track… imagine a world in which twitter isn’t a silo, and it’s possible to rate other users on any scales you wish. You could rate someone on how “corporate shill” or “honest” or “intelligent” or “funny” or how they lean ideologically… and share those ratings.

You’d be able to do it on a single piece of data, or a string of them, or on the person sending them.

This would be a tremendously useful filtering mechanism.

It could apply to almost anything, not just tweet streams.