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We all seem to have a bit of a downer on Groupon. For various reasons, there seems to be a morbid fascination with bringing down what is (or rather, was) essentially the global leader in local deals. Everything seemed fine – deals initially presented a wonderful opportunity to get something local to us (and we probably knew of) for a lot less. But then everyone jumped on board and websites with a naturally local geography began delivering local deals on top of the global deals.

It all went a bit pear-shaped, amidst complaints of providers having to give too much money to Groupon, not making any money out of the deals (many claiming they were losing money) and customers claiming that their deals were not being honoured (as a result of the loss-making nature of the deals).

One of the big unknows is one of reputation though – Groupon’s is all over the place (thanks, in part to the recent departure of the Group Head of PR). For the first time, thorough research has been carried out analysing the reputational impact of the businesses that take part in deals – and it doesn’t make for good reading.

The research, carried out by John Byers and Gerogia Zervas from Boston University and Micahel Mitzenmacher from Harvard University studied over 16,000 Groupon deals in 20 US cities between January and July this year. They monitored each deal every ten minutes or so to determine how sales varied over time and also counted the number of Facebook likes that each deal generated.

At the same time, they collected Yelp around 56,000 of them from 2,332 merchants who ran 2,496 deals–examining how merchant reputations changed before and after a Groupon deal.

Interestingly, their methodology looks to be sound as they were able to arrived at more or less the same value of sales through their period of analysis as Groupon announced in their corresponding period figures. Further analysis points to the direct impact that Facebook likes have on word of mouth, contributing significantly to a deal’s popularity.

However, the most interesting aspect (as the graphic shows) is the negative impact Yelp scores by customers who have redeemed the deal. In the cases where the Yelp reviewer mentioned either “Groupon” or “coupon”, review scores were 10% lower than average. In the case where BOTH words were used, review scores were 20% lower. It is worth noting that this is NOT totally indicative of ALL experiences, and the research is based only those reviews which included one or both of these words – the volume of reviews is much more significant. Groupon’s Hidden Influence on Business Reputation

Evidence certainly lends itself to supporting the Groupon model as not only a profitable but also sustainable one, but my feeling is that a lot of the criticism should rightly be levied at the naive partners not understanding what they are buying in to.

Sure, Groupon sales teams are no doubt aggressive in their approach, but the horror stories of not understanding cashflow and not phyisically preparing for what a deal ACTUALLY requires are aplenty. From poor stock management to physical space in the shop and poor customer service – the groupon deals merely highlight these issues more than you realise.

In the words of the researchers:

“This could indicate that a more critical audience is being reached, or that the fit between the merchant and these new customers is more tenuous than with existing customers”.

The interesting point would be whether or not the deal prompted a typical non-reviewer to post a first time review, or a frequent poster to post a more negative one than usual.

But, whilst it’s easy to Groupon Bash, are the merchants themselves as much to blame? Could or should Groupon be more proactive in preparing a business for a deal? After all, if Groupon are sticking with the line of recruitment marketing being one-off costs, then more merchants having successful deals and therefore repeat deals would make much more financial sense.

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I spent ages writing the usual considered analysis of the Eurostar debacle, only to find that someone had beaten me to it – so be it, but good piece anyway. It’s well worth a read. (one question though – why the hell use posterous to publish such a lengthy blog post…)

To any business out there considering social media – this is your wake up call. Let Eurostar get a kicking for this and learn from their mistakes.

YOU on the other hand can do it the right way. You cannot get involved in social media if you don’t:

1. Know who is already talking about you – for god’s sake if you do NOTHING else, listen to conversations taking place about you.
2. Have your assets protected – make sure you own your brand name on all the places you need to use
3. Get your back office sorted:

  • Assign people – Know who is going to do the listening, where and with what.
  • Triage comments – deal with the most important/dangerous/
  • Define the information flow – know how information will get from the end user to the person capable of answering it.

As much as We Are Social annoyingly name drop work they have done into every comment they leave on the web EVER, they have some bloody smart people working there and I do think they have been unfairly criticised for their role in this – they have gone beyond the call of duty to manage a problem that is not of their doing, nor their brief to sort.

Eurostar it seems, just didn’t want to do it properly (although I’m not sure I would have said as much on my company blog) which is a fundamental problem and one which ties up my previous post about clients needing to place more trust in the agencies they appoint – that they are doing this properly.

Sure, the problems would not have gone away, but Eurostar would have been much wiser to listen to the people they appointed to run Little Break, Big Difference – after all that is a great piece of work requiring a major budget. If they can trust we are social to implement an initiative of this size, then SURELY they must trust them to help them manage their comms in the same channels too?

Emma Harris, Eurostar’s Sales and Marketing Director shows the problem:

“We’re the commercial department and we were kind of ready for social media but the business wasn’t. To start involving crisis communication and disruption messages into social media, we just weren’t ready for it. “

Again, as per my last piece, perhaps there are so many snake oil agencies out there that clients have come to distrust every agency they meet, or perhaps the comms team see social media as a marketing thing…or perhaps marketing see this as a comms thing…whatever, if you learn one thing from this post and the whole debacle:

Customers are platform and stature-neutral – they don’t care about who you are. Find ways to deal with them in their playing field how they want to play.

WAS – good job folks. I think you’ve delivered above the call of duty and given a good account of yourselves.

Update: please read Andrew’s post for an incredibly balanced, considered view! Your life will be better for it!

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Socia Media Marketing

As some of you already know, we are putting on a seminar in London on Tuesday entitled Social Media Marketing – and there are some great speakers attending.

Dave Kinsella (aka @Tech0tic) will be kicking things off with an overview of Social Media, what to do, what not to do, and covering an area of much interest for me – social media metrics.

Next up is Neville Hobson who we are again, delighted to have to share his insight into how social media is/has/will affect PR.

Then, we have the guys behind the LG Blog, Dan and Chris from Outside Line will be shedding some light on the thinking and activity behind the LG blog…

…and yours truly will be talking about blogs and blogging as a business communication tool as well as looking at buzz monitoring.

I am really looking forward to this one – we have got a FULL HOUSE an surpassed all previous bookings which means that people are really waking up to the potential of social media!

If you are coming and you are on Twitter, DM me, @ me or just give me a call. In the meantime, my amended presentation is below:

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cluetrain manifesto cover I see a lot of people talking about getting “it” and by “it”, they are referring to The Cluetrain Manifesto without being so explicit as to mention it by name. I see how fundamentally it has changed many modern marketeer’s perceptions of where their late 2000’s marketing activity now needs to be – or rather where their market allows it to be.

The book really did change the way I thought. I suppose, like The Blue Monster, I wanted to change the way people saw my products and the business I represented – but perhaps more importantly, how I interacted with those customers. (nb, This was 2006 and I was running my own online bathroom store www.bighippo.co.uk)

With a conventional direct marketing background I was intrigued by the ideas the book threw at me and the opportunities that social media presents in creating this “new” two-way relationship.

Back to the present day, many millions of blogs now deal with this pr and marketing front line – the next great idea and keeping their readers up to date with everything new but my experience over the last year has shown that

But in my experience of dealing with a wide range of people (clients, colleagues and other “social media luvvies”) it is obvious that there is a genuine need for people to understand WHY they need to engage with social media and to understand the fundamental shift in power from brand to customer.

So…below lies the first in a series (regular series!) which puts a personal interpretation of the 95 Cluetrain Manifesto theses which I hope help bridge the gap between olde worlde marketing and new thinking. helps achieve this. I have also added small footnotes below each item to try to put a more practical angle on each point.

In the true spirit of the new world, feel free to chip in and contribute and I hope to meet many new friends – I am at paul dot fabretti at gmail dot com or @paulfabretti (you know where!).

1) Markets are conversations: Try not to think of talking to your market as a one-way street, or a “them and us” situation. Think “market stall” mentality and you are on your way there. Customers can tell you as much useful stuff as you can tell them, so give them the chance to speak to you.

√ – Think taxi driver. Exchange of a service for money but it is civil, human and more importantly interactive.

2) Markets consist of human beings, not demographic sectors: Demographics are numbers and diagrams. They are devoid of feeling, circumstance, family situation – devoid of emotion. Don’t go any further until you realise that no demographic analysis can give you insight into human emotion – and buying is an emotional process.

√ – Think of what you FELT when you last bought a major purchase. Demographics can’t show feelings – humans can.

3) Conversations among human beings SOUND human. They are conducted in a human voice: “to whom it may concern”, “in respect of” and terms like “vis a vis” and “hithertofore” are just a few examples of corporate speak that makes people either frown or turn people off. Speak to people the way in which you would like to be spoken to.

√ – Write something then read it out. Does it sound like something you would say? If you have to pause when reading, it isn’t right for you. Alternatively, say out loud what it is you want to write and notice how smoothly it flows or even record yourself saying what you want to write. The most constructive criticism sometimes comes from hearing your own voice!

4) Whether delivering information, opinions, perspectives, dissenting arguments or humourous asides, the human voice is typically open, natural, uncontrived: Use as many short words as possible, just like you would when you talk – it makes content short, punchy and to the point. Using words like “therefore”, “in retrospect” for example are what I call “padders” – they are there wimply to fill in space until we make your point! Kept it short and sweet and you’ll get to your point quicker!

√ – Listen to politicians answer questions – and do exactly opposite. Find ways to make their answer shorter and get to the point quicker.

5) People recognise each other as such from the sound of this voice: in writing and speaking in the human voice, people will readily indentify that there is another human being on the other side – and will engage more with what you have said. Whether you use txt spk or a familiar tone of voice, it is proof that there is a human being behind the message NOT a corporation.

√ – Show a few posts or messages to non-customers, friends (and family) who have nothing to do with your business. If they can understand what it is you are trying to say (because of the way it is written) – you can be pretty sure your customer will too.

6) The internet is enabling conversations among human beings that were simply not possible in the era of mass media: email, IM, forums, tangler, wiki’s, blogs all enable people to communicate quicker than ever before. Furthermore, with no geographical boundaries stopping the worldwide communication of messages we really are making the world a smaller place.

√ – Go to places like Technorati/Google/Google blog search and enter a brand name. Note how many different languages and methods people are using to talk about that brand. These are all people who could be talking about YOUR BRAND and in ways you didn’t know.

7) Hyperlinks subvert Hierarchy: It doesn’t matter who you are, what your title is or how much you earn – linking is status-neutral. Today a school kid can link to a CEO and blow the socks off what has been written. An addition to this thesis could be “Hyperlinks subvert Hierarchy and promote Humility”.

√ – Take anything you have written and revert to points 3, 4 and 5 – does it sound like me? Would I say this? You may never be able to control some comments, but you can easily minimise those negative behaviours that result from a pompous attitude!

8) In both INTERnetworked markets and among INTRAnetworked employees, people are speaking to each other in a powerful new way: As methods of communication between people becomes quicker and more widespread, so does word of mouth grow more powerful. More people are finding new ways to reach each other and find more and more things out about each other and products. Some of those people will be your employees. What are they saying about your brand? Does their experience typify the customer experience? Are they talking to non-employee customers?

√ – Create an intranet or at the very least a forum where the business and its operations can be discussed by internal staff. Make it anonymous of needs be. Allow the voice from within to make suggestions, highlight problems and give customer feedback. If it can’t be said behind closed doors it will never be said at all. Give people the chance to speak.

9) These networked conversations are enabling powerful new forms of social organisation and knowledge exchange to take place: As a social species, it is in our nature to mix and communicate (there’s a reason we can talk and monkeys can’t!). Whether that is IM, email, forums, phones or face to face, the easier communication is the more it will happen. The more it happens, the greater the likelihood that people will be talking about your brand at some point. Taylor Woodrow (a major UK house-builder) didn’t think it could happen to them until they found snagging.org! As with all WOM, a critical mass and momentum builds which, given the ease with which people can communicate online, will snowball whether good or bad. Understanding the power and speed of online communication is essential.

√ – Become part of those networks. Participate, be a part of the very networks who can make or break you.

10) As a result, markets are getting smarter, more informed, more organised. Participation in a networked market changes people fundamentally: Networks provide an easy means for people to swap horror stories, solve problems, offer tips and advice, discuss avoidance schemes and discount offers etc. Who doesn’t want to know how they can get something for less, or get something for free or find a way of avoiding a 10-minute wait on an 0870 call to customer services? Reciprocating favours brings people together, creating communities where (in the main) people will return.

√ – Embed yourself in communities associated with your product and see what people are talking about. Don’t be fooled into thinking a self-hosted forum will work – it won’t. People will be suspicious. Join forums where the REAL community lives and see what areas of concern people are talking about. Are they complaining about call waiting times – address it by putting on extra shifts. Are instructions difficult to follow? Commission some extra photography. Communities will tell you far more about your business than outbound calling will EVER can.

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