Ding, dong! The daily deal coupon business model? It’s officially dead.
OK, I know I really shouldn’t laugh at another company or person’s misfortune.
But this one is just too easy!
News spread fast and hard today about the firing of Groupon CEO, Andrew Mason
Here are just a few examples…
- The Globe and Mail: Groupon Ousts CEO as the Daily Deal Fad Dwindles
- The Toronto Star: Struggling Deals Pioneer Groupon Ousts CEO Andrew Mason
- The Toronto Sun: Groupon Fires CEO, Mason Admits ‘Failure’ in Candid Memo
- CNN Money: Groupon Fires CEO Andrew Mason
- The New York Times: Groupon Dismisses Chief After a Dismal Quarter
- The Wall Street Journal: Struggling Groupon Ousts Its Quirky CEO
- The Chicago Tribune: Groupon CEO Andrew Mason to Staff: ‘I Was Fired Today’
- …Need I go on?
Back in December 2010 (My God, have I really been blogging for this long?), I wrote a blog post about Google’s failed attempt to buy out Groupon for (get this!)… six billion dollars. That’s a whole lotta money! Especially since they had only purchased YouTube prior to that for a measly $1.65 billion.
Well, guess what? Groupon made the biggest gaffe in the company’s (short) lifespan by turning down the money.
That’s right. They could’ve made bucket-loads of money. Many, many, maaaaaany buckets. But instead, they opted out of the offer… probably because they thought they had a monopoly on the daily deal business model.
I mean, yeah, there were wannabes who tried to copy their success (LivingSocial comes to mind…). But they must have thought: “Surely, no one can beat us! We’re synonymous with the daily deal!”
Yeah, well let me tell you this…
Daily Deals Just Don’t Work
Trust me. I’m saying this as someone with an inside track on the coupon industry. That ship has long past sailed. Extreme couponing? That fad came and gone. We’re no longer living in 2010 or even 2011!
But I’m also expressing this sentiment as a person with direct connections to…
- They usually end up frustrated, often with negative customer experiences
- Ever bought a Groupon gift certificate for a spa or auto detailing shop, only to find out you can’t book an appointment for months… even upwards of half a year? Sound familiar?
- Many small business owners dip their toes in the muddy waters of daily deal promotions in an attempt to gain a new crop of returning customers
- What they end up attracting? Nothing but
shameless vultures and leeches
- And these deal-savvy consumers (read: probably the same types of people who do nothing but enter sweepstakes all day long, a.k.a. “sweepers”)? They’re anything BUT brand- or store-loyal!
- To quote Ursula of The Little Mermaid, these poor unfortunate souls… I feel the most sympathetic for this group
- Why? Because through no fault of their own, they’re forced into the unfortunate scenario where the store where they’re employed at suddenly decides to start offering Groupon promotions
- And this is bad because their usual crop of loyal, paying customers are now replaced with the aforementioned “anything-but-loyal” vultures and leeches
- So instead of expecting great tips from loyal customers? Sayonora to that! (And don’t think those loyal customers would want to return back, either… once they find out they can’t book an appointment for months, get fed up, and end up never returning)
So, yeah. Long story short…
Guess Groupon should’ve accepted that $6 billion buy-out offer from Google after all!
And that, my friend, is the reason why I’m chuckling inside (I promise, I’m normally not a bad person! Scout’s honor.)