Group Buying: It’s More Than Just Providing Discounts

Credit: dealio.com

Last night, I attended Net Tuesday Vancouver, a meetup where “Social Media and Web Innovators come together with Social Change Makers and Nonprofits to mix, swap stories and ideas, and build new relationships.”

This month’s topic is group buying and Google Analytics goals. I haven’t had enough experience with Google Analytics yet, so that part of the meetup actually didn’t make too much sense to me. The panel for group buying, on the other hand, was great because they brought in perspectives from both the non-profit organization and the group buying company.

Chris Mathieson is the Executive Director of the Vancouver Police Museum, a non-profit that has already offered two Groupons. Chris considers both Groupon campaigns a success. Annalea Krebs is the founder of ethicalDeal, a group buying site with a focus on environmentally-friendly products.

Why Group Buying is All the Rage

Annalea briefly discussed why the group buying business model makes sense. First, there’s the viral component – the model requires a minimum number of transactions before a deal becomes official, and so there’s an incentive for users to spread the word and invite friends. Secondly, there’s the sense of urgency. Deals are only on for a short period of time (usually 24 hours), and this urgency usually convinces people to get on it and grab the deal.

Of course, neither one of these are really a surprise, but I think that this is a good framework to start the discussion. These also suggest that group buying is likely here to stay, given that the business model behind it makes sense. (Google’s attempt to buy Groupon for $6 Billion is probably another indication that group buying is not a fad.)

What About Relationships?

From the non-profit side, Chris shared a glimpse of what it’s like to work with Groupon. To participate, the organization/business is expected to provide deep discounts – at least 50% is recommended. Again, this not really surprising as this is one of the main draws of group buying. It is quite interesting, though, how the revenue is split between Groupon and the organization.

A major consideration for the organization should be the consequences of the deal. Given the popularity of these deals, a spike in customers should be expected. A critical question for your organization is whether you have the necessary resources for this increase in business.

Also, group buying sites will get people in your organization, but it is up to you to build the relationship from there. Have a plan on how you can build on the relationship once customers are at your door.

As an alternative, Chris mentioned the possibility of building partnerships with other organizations such as Yelp or Google Places in order to strengthen customer relationships. (Location-based apps such as Foursquare and Gowalla were also mentioned.) The one advantage of these sites over something like Groupon is that organizations can offer on-going discounts. Creating brand loyalty may be possible with these sites.

Chris also mentioned that once an organization offers a deal, other group buying sites may approach to see if you’d like to do it again. Be careful with this. Think about whether you really want to be seen as a discount brand. Don’t compromise your brand identity for promotion’s sake. This point is especially true for non-profits, who may be strapped for resources and may not be able to offer discounts all the time.

Conclusion

Group buying is something that’s relatively new, but it definitely has a place for businesses and non-profits. If done right (i.e. with lots of preparation) and if done occasionally, it can definitely contribute to an organization’s brand awareness.

This month’s meetup was great, and I’m impressed that attendance seems to be growing every month. If I had one complaint, it’s that the panel could have been more diverse. There is value to having opposing views on a panel. I think that the organizers could have extended an invite to organizations that haven’t had a good experience with group buying. (On a side note, I think Scott Stratten’s blog post on how to make a conference panel rock is pretty bang on.) Chris provided some good things that organizations should think about, but it may have been even more interesting if these insights were coming from someone who haven’t had success with the process.

Overall though the meetup was informative, and there was even free food! (W2 Storyeum sponsored the meetup.) There won’t be a Net Tuesday meetup for January, but I’m already looking forward to the February one!

Were you at this month’s meetup? What were some of the new things you’ve learned? Leave a comment and let me know!

Old Spice Shows How Us How It’s Done

Photo Credit: http://theinspirationroom.com/daily/2010/old-spice-manmercials-man/

Unless you haven’t been online at all last week, you likely have seen at least one of the 180 YouTube Old Spice videos. The “Smell Like a Man, Man” campaign took over all social media for a few days last week, showing everyone how viral marketing should work. Of course, the tricky thing about viral marketing is that it is controlled by the people, not by companies or their advertising agencies; however, this campaign shows us how the right mix of ingenuity, research, planning, and inspiration can bring unbelievable results.

The genius idea was really quite simple: For two days, the Old Spice guy (his actual name is Isaiah Mustafa), made personalized videos for fans, bloggers, celebrities, and everyone in between. According to a ReadWriteWeb article, the comedic videos were made in an undisclosed location in Portland, Oregon and was a collective effort by “a team of creatives, tech geeks, marketers and writers”.

The key to the campaign was that it engaged viewers, ensuring in return that these viewers made the campaign viral. The campaign spoke to you; in fact, if you’re one of the many who got a personalized response, then I meant that quite literally.

See a couple of the standouts from this campaign as well as a pretty awesome parody after the jump.

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I’m lovin’ it: New marketing communications campaign from McDonald’s France

Via Towleroad…  It looks like McDonald’s France is serving up some young gay love. In it’s new advertising campaign titled “Come as You Are”, McDonald’s France is featuring a teenage, closeted gay guy talking to (presumably) his teenage boyfriend while his dad purchases food from the counter.

I’m not sure if this is first in a series of ads, but does it look like the ad is somewhat incomplete? If the ad is complete as it is, what message are they trying to tell us? Are they encouraging gay guys to be in the closet? (I realize that this is highly unlikely.)

There’s one thing you can’t deny about this ad. McDonald’s Restaurants, regardless of all the flak it receives for not contributing to obesity, still remains one of the most innovative establishments around. Its willingness to take on subjects that most companies would consider “risky” is admirable.