I’ve had a draft of a review of GroupOn in my folders for the past 9 months. Happy to say I agree with most of what I wrote then. Things were put in perspective also when helping a client with their online channels today and chatting with a few GroupOn representatives to examine if it was an option, don’t think so for that client I’m afraid. So, without further ado, a review of GroupOn. Please feel free to share your experiences if you have any of GroupOn in ze comments box!
This start-up has grown incredibly rapidly since late 2008 and connects consumers to deep-discounted services from retailers and other suppliers in their vicinity.
Bring consumers cheaper goods and services while allowing merchants to start to build a relationship with each individual consumer by enabling the sale of an initial product or service.
The service consists of a subscription service where a user can sign up to receive special offers from their town and a website where the special offers can be browsed. The idea is that a certain size of group must sign up to a deal in order for it to be activated. I haven’t seen the merchant end of the service for reasons I discuss on the business end a little further down.
GroupOn takes a fee for each sale arranged through their platform, a fee-per-sale model which is always attractive at least initially for vendors. They also have a huge database of people signed up and local businesses.
What I would review or change
The initial impression from a design point of view is quite pleasant and clear with a deal of the day taking up most of the front page and other deals listed on the right hand bar. Also, there a lot of action-inducing psychological ploys built in such as counters to the deal ending, nice juicy Buy! button and other info on the deal now being on adding to a feel of a one-time offer.
The rest of the technical and communicative aspects of the site are very well done, professional and clear. They actually manage to communicate quite a lot of information clearly in a small space, often a challenge when you’re communicating something new.
However, a problem is the targeting of offers where the mail shots, at least the ones I’ve seen and also received, have been offering breast implants and other services I don’t really think I’ll be needing anytime soon…, and the end result is a wave of communicative fatigue from the receiver point of view as you have to wade through the deals to find anything of any value. This is again a relatively simple fix to do if you want to follow the rules of relevance in communicating with people. In general, you can partly fix this by asking people WHAT they want to hear about, and WHEN they should mail you that information but there’s no functionality to support this in the user area.
Also, if you bang in groupon.com, and you’re not in the US you still get a list of US cities! It’s not a hard thing to find out where someone is surfing in from and tailor the content to their region, and should really be done by a company providing local deals. Many people enter .com after a domain name still today, not the local variant, especially if it’s an American startup. So, there’s probably some traffic, or at least annoyance, left on the table there.
The deals offered are excellent in value though for the end user, likely pretty good for GroupOn but not good enough judging from the burn rate of cash. In this article I’ve linked to there are also some worrying stats about merchant loyalty at 42% not returning to do business, meaning that for these people it probably wasn’t good for them.
I like the design and communication of GroupOn and could imagine people engaging with it more if it was focused around what groups of needs people actually have, not what deals happen to be on. Then it would have a chance of becoming indispensable.
But if you deep discount a service by a huge amount then for the merchants, the only ones who can offer the products and services, the chance of making a good profit becomes low and they become dependent on repeat business from that same customer. Now the chance of repeat business is low because it’s probable a large part of the target group are price-chasers and so will go elsewhere, and the ones who do come back may feel they are paying an unreasonable surcharge every time they rebuy the service at the normal rate. The other problem is the risk of brand damage where any investments in being seen as quality may become eroded as more and more rock-bottom deals are offered in connection with a particular brand.
I believe the key to a good service is providing value, not just to one stakeholder (here the bargain-hunting consumers) but to all stakeholders. In my opinion it’s not clear that GroupOn will be able to deliver enough value to merchants without diluting the normal merchant offerings, and generate the repeat business which would allow merchants, GroupOn and the end consumer to benefit. Unless it can solve this it may end up being a player solely for the frugal who hunt in flocks. This combined with the shaky economics of their business model leaves me wondering what they’ll do to start turning a profit yet keep their offering intact.
If you have an opinion, positive or negative, you know what to do below!
And here’s my next review of a service called Skillpages which I joined some months ago and which is actually in the same or proximal space to ReferralKey.
This start-up is based out of Dublin, Ireland and Boston, USA and aims at connecting people with skills with the people who need the same skills for a task or project.
Allow people to leverage their networks to bring them closer to a deal by showcasing their skills in direct connection with an acquaintance’s profile.
I can’t recall exactly how I ended up there and so am not sure how Skillpages is working the seeding of users and buzz stage but the social sign up for Facebook and LinkedIn on the front page along with PR is probably driving the bulk of it right now. The service itself is very slick and does much of what you expect it to. It’s also well laid-out and pleasing to the eye, most features appear to be placed logically with very little clutter in terms of communications or design. The similar users feature is rather good and seems to match based on location and skills. There’s a good feedback and idea generation loop on their co-create page which will build dialogue and the service. That’s a good signal of a company which will listen to its users and benefit from it. All in all, an excellent launch service.
What I would review or change
The opportunities feature seems like it could do with some retuning. I posted a Skillpage where I used keywords around online marketer and traffic but no opportunities appeared though by looking I could see there were some relevant ones for me. Also, see my comments below on Opportunities as crucial.
Rejig the communications around opportunities instead of viral signups as the first wave of users has been driven now.
It would be cool to be able to resync profile data from LinkedIn as otherwise I have to change my profile in two places if I change on LinkedIn.
The focus on networks and trusted networks seems a bit dated in my opinion. The users of a service like this already have the networks and they are in effect giving it to providers like Skillpages so they can add value. Where they can add value is in the opportunities, basically a kind of social marketplace.
A very strong first service with excellent user-friendly functionality. Certainly beats ReferralKey on some points and is ahead in terms of experience but like ReferralKey needs to deliver on the promise made to users.
The main thing I would focus on now is the opportunity flow. The first bulk of users is in and now value has to be created for them in order to make them stay, the primary method for this, considering the service, is driving opportunities which are relevant to the user base gathered.
Another observation is that because they are casting the net very wide and are trying to help networks of people uncover each other’s network of reliable helpers, they may run out of steam and not be able to offer enough value to many of those segments. It might be a good idea to do industry tranches of users and concentrate on jump-starting their use of the opportunities and then move on to other tranches as they get up and running. Another option here could be to focus on opportunities for webbies or one other early-adopter group and then figure out how to branch out into the next bunch of users.
There’s a strong team behind it that implies it should be able to build successfully on what it’s doing. I like it so far.
I got an invite for a service called ReferralKey a few days ago and seeing as I think the service is interesting but has some weaknesses in my opinion I thought I’d review it and offer suggestions.
ReferralKey’s business concept
Referrals are the business concept for this service which has been around since 2007. It’s trying to monetise a behaviour which people exhibit anyway, and also to drive more focused and more frequent referrals through offering a functionality which supports the behaviour. A user can offer a bounty to others who refer leads. It’s also nosing at the reputation management space and, at least in my opinion, they need to integrate these two things more tightly and better if they want to succeed in the long run.
They’ve built a decent seeding platform which allows users to invite their networks on LinkedIn, Twitter, Gmail and other services to the ReferralKey service. It could be a little smoother but works and will provide a growing user base. There are also some nice social elements to promoting yourself. The Send a Referral function is quite basic to start with and also works, as does the Ratings function. I give my views on those below.
What I would review or change
The actual way the service works is a little fuzzier with the titling of some features a bit off such as the “Brief” function. This is actually a messaging function with private/public functionality which could function as a way to give another user a brief in the business-sense, which one assumes is one of the actions the platform intends to enable. But seems to be primarily a messaging function in the way it is presented and so is misleading in the way it’s described and used, or needs to be fine-tuned somewhat.
For Sending referrals there’s quite a lot of work to do to streamline the process. For instance, if I’m importing my contacts to the ReferralKey service then I would expect to be able to send referrals between those contacts with a couple of clicks but there’s no integration of this when I’m trying to send referrals. I instead have to fill in fields by hand. However, there is a feedback loop to indicate how a referral went and that, provided it’s used, will provide value over time. I think this should be built into user ratings to show the reliability of referrals and other related info of value.
On that note, similarly, if I am to send a referral then the actual Rating ascribed to the person I am referring will be pretty important to the person receiving my recommendation. At the moment this has a very rudimentary star rating system and the functionality doesn’t really fill any role besides very vaguely supporting my personal recommendation. And, is extremely easy to game as there’s no insight into who did which rating, no comment functionality and because you’re inviting people from your professional network in it’s quite likely that you will be positively rated. In my opinion it’s here that ReferralKey can leverage the network created and start to drive referrals. The more reliable they can make the ratings on each professional and their services, the more likely people will be to use their service and trust referrals via the network. Trust can also be generated by building the outcome from referrals into the ratings features. In general, the more transparent, communicative and bi-directional the ratings become the more the relationship grows between rater, ratee and the referrer and that starts to make the site sticky.
The Pro portal is a nice idea to offer non-referred leads but this also feels and looks very basic and maybe is something that should be offered by a third party? Or should be done later once the integration of some of the features in the primary service is working the way it should.
ReferralKey has great potential and has built a good platform for gathering an initial seed user base. The service itself at the moment is very basic and needs tighter integration, transparency of ratings, a tighter feedback loop for referrals feeding into ratings and possibly the dropping of one or two activities to other players or to a later timeframe . If anyone reading this has an opinion then please share it!
Just posted on going mobile, in a non-technological way, with the Féile Icarus to-be-pimped bus. If you can help or know someone who can please share with them or reply.
Been in Ireland now for about 6 weeks and we’re finally beginning to find our feet. And I’m happy to say there’s lots happening on this island. In the midst of the media doom and gloom and the deathly focus on politics and generational debt there’s a real buzz going on.
Out here in Connemara I’ve met a lot of people gearing up for the tourist season with a pile of ideas and actually the drive to carry them out. From adventure cycling, to artist tourist trails, to the resurrection of ancient roads and walks to anything else in between.
In Galway city I’ve met people building apps, music experiences, business hubs and creative spaces. It’s hard not to be energised.
This week I’ve a few meetings with other entrepreneurs and a few projects to move along including Féile Icarus and an as yet unnamed one. Already with Féile Icarus there are a few interesting developments that I will be posting about on that blog as they develop. Triamu is also moving to a new stage of development.
In the meantime, if you happen to be in Dublin this week then try going to the Dublin Web Summit. Looks like there’ll be a serious amount of attendees and stuff going on. I’d like to go but have too much on at the moment so will pencil in for next time instead.