Coupon, If You Dare
Wednesday, October 5, 2011
The endless-loop news of Groupon's financial bleeding — largely self-inflicted — brings no joy to those who thought they were on to the next big thing. As Sunday's New York Times points out, the daily-discount site was all-too recently offered a stunning $6 billion from Google, but the time-tested combination of corporate hubris, greed and flimsy accounting got in the way of all of that.
While Groupon regroups and merchants complain of millions upon millions in unpaid fees and disloyal customers, brand managers must surely be quietly grinning their "told you so's." Competing on price is the last horizon of hope — where to go after that? And customers cannot be "bought" anyway; they have to be earned and genuinely valued. Coupons, when nothing more than a mass-pushed discount, are cheap siren calls that devalue both brand and consumer relationship. Groupon's and others' real challenges will come not just from their financial murkiness, but in their fundamental creation of negative value, in our view.
Treat coupons like currency to be earned— something of real value given only for desired behavior before the sale — or as an extension of meaningful content, and then there might be some relationship and some value to them. Otherwise, they are bottom of the barrel tactics for those who are desperate and don't really know how to manage a brand for richer connection and loyalty. If desperation is the next big thing, we are in worse shape then any thought.
For the merchants in the Times' article who were surprised by "one and done" visits: what did you expect? They girl you can buy is never the girl you marry.