Apparently the headline for Groupon’s press release on Tuesday read ‘Groupon raises, like, a billion dollars’. A dream on many levels but what the…and aren’t they just, like, another online discount shop?
According to the FT on Tuesday, ‘Groupon has completed a $950m round of financing with investments from a number of venture firms, giving the online discounter a multibillion-dollar valuation and setting the stage for a likely public stock offering this year.’ International expansion is purported to be top of its to do list.
Groupon is one of those ideas that you wish you’d thought of but oh so obviously didn’t. The idea of clubbing discount coupons together online is so simple and so obvious and so bloody great – it’s intensely frustrating. Like Facebook, founder 29 year old Andrew Mason, takes an avid existing offline mass consumer behaviour online – and does it well. People like to stay in touch with each other and people love a good discount. No wonder Forbes describe Groupon as the fastest growing company and no wonder they’ve secured a billion in first round financing, one of the biggest in history.
Despite the enormous bucks bandied about, what I find most interesting is the way founder Mason is turning marketing on its head. With Groupon, Mason is ensuring marketing works for consumers first and then the business. Putting consumers in control is incredibly difficult for most businesses to understand as a concept but here is a blindingly good example of its effectiveness. Most marketing, not all, but most from my observation, satisfies the business processes and objectives first and then through a clunky politically approved and researched formula pushes at its consumers.
Forbes further describes the beauty of it; ‘Mason’s model is transforming the way companies–especially smaller ones with limited marketing budgets–snag sales. In May Groupon sold 6,561 tickets to a King Tut exhibit in New York’s Times Square for $18 apiece, little more than half the list price. The campaign brought in $120,000 at virtually no marginal cost to the exhibit; Groupon pocketed about 50% for a day’s effort. The most popular item so far: a $25 ticket for a Chicago architectural boat tour sold for $12. In May Groupon moved 19,822 tickets in eight hours and split the $238,000 with the tour operator…Mason’s marketing team consists of an army of 250 salespeople and 70 writers, many plucked from the Chicago improv scene, to concoct witty pitches for deals. We want to do for local e-commerce what Amazon did for normal consumer goods,’ he boasts.
Following my sign up and quick referral to various friends to gain credits, today’s deal for Whiter, Brighter Teeth with ZOOM2 Laser Teeth Whitening and Sparkle and Polish Using Airflow for £119 instead of £505 at the Kensington Dental and Smile Spa, isn’t for me but I’m sure something will pop up that will turn me into an active groupie.