Snapshot: Groupon

31-08-2012

Since its launch in the US in 2008, Groupon has quickly grown into a successful online group buying platform. TB&I talks to its UK arm about how the business works.

How does the Groupon model work?

Groupon launched in the US in 2008 and spread to the UK through the acquisition of MyCityDeal in May 2010. Groupon is the UK’s leading group buying website and features a different deal every day in more than 60 regions across the UK and Ireland.

Groupon provides offers on local restaurants, spas, beauty salons, gyms, online shopping, tickets for gigs and performances, and much more, at discounts up to 70 percent off the normal price.

Anyone can view and buy deals simply by visiting Groupon.co.uk. Every deal that appears on the site has a cap that is agreed with the partner and runs for a limited time only, so customers need to be quick and book their deals before the time is up.

Our business model is a revolutionary new concept and is a win-win-win partnership between us, our partners and our customers. Through our platform customers are able to discover new experiences and things to do, our partners acquire new customers and we benefit when our partners are successful.

What role do social media play in Groupon’s brand awareness efforts?

Groupon uses social media to inform and educate customers about our collective buying model. We post content which portrays us as being a regionally-focused lifestyle brand giving consumers the opportunity to save money on things to eat, see, and do in their cities.

As a result our brand voice is fun, quirky and, most importantly, helpful. We proactively provide a communications hub to help support customers during all stages of their Groupon purchase with the main focus being providing transparency, soour customers can post deal-related enquiries, pass on feedback and interact with each other.

"Making your brand visible, friendly and customer-centred will go an awfully long way in terms of retaining existing customers and acquiring new ones."

Large household brands and retailers are successfully beginning to weave social media into their sales, marketing and new business processes but this has not yet trickled down to the local commerce level. This seems insane to us, especially as there are more than 4.5 million small and medium-sized enterprises (SMEs) in the UK alone, employing an estimated 13.8 million people, with an estimated combined annual turnover of £1,500 billion (US$2,400 billion). By bringing the weight of the Internet and social media to smaller businesses we are growing a new customer base for this incredibly vibrant and important section of our business community.

How does Groupon deal with imitators? Have many people tried to copy the model, or even the brand?

Many companies have tried to replicate what we do, but none of them has been able to develop as quickly or engage with the level of businesses that we have. People tend to underestimate the dual nature of the Groupon model. We are both a technology company and an operational company. You cannot deliver the service we do without both sides of the coin.

We will continue to evolve and develop the technology that serves our features up to consumers as well as the technology that enables our business partners to run their operations more effectively.

This can only be done in close partnership with our local merchants, which means a focus on the operational part of our business: having the right people on the ground, and having an understanding of what is hot in the local areas we operate in, as well as the consultants at the end of the phone supporting our partners on a daily basis. Hitting these vital factors has been the catalyst for our success.

What advice would you give to someone running a new Internet business, in terms of building a brand?

Now that customer service is so frequently carried out in public forums, customersatisfaction is absolutely key. Customer queries or messages should always be responded to promptly and the response should always try to go above and beyond. Making your brand visible, friendly and customer-centred will go an awfully long way in terms of retaining existing customers and acquiring new ones.

What does Groupon have to do to provide guarantees over trademarks and brands to its commercial partners?

If we receive specific guidelines from a partner regarding how it requires its branding to be used, Groupon will vigilantly follow these guidelines. If a third party is involved, we will also follow guidelines laid out between the third party and the trademark holder.

What are the main challenges Groupon faces when protecting and promoting its brand online?

Given the nature of Groupon’s digital advertising online business, we have a number of checks and balances in place in order to ensure the protection and promotion of our brand image online. We work closely with our advertising partners to ensure they only advertise us in the agreed inventory and using the creative material we have supplied. We have to be sure that the businesses we are advertising fall in line with our brand before any campaign can be given the go-ahead.

This article was first published on 01 September 2012 in World IP Review

groupon, social media, mycitydeal

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