How to Save Groupon (& Living Social)
2 core ways these platforms can stay competitive
Groupon acquired LivingSocial at the end of 2016 in a bid to conquer the market, while both companies continued to be plagued by negative reviews, plummeting stock, and a problematic business model. None of these things will change by Groupon absorbing LivingSocial.
Here’s what can.
Vet Like You’ve Never Vetted Before. Both of these platforms and their customers are repeatedly the victims of having to deal with sub-par businesses who can’t or won’t deliver quality products and services. If you look on Yelp for reviews, a sizable number of companies whose deals are being advertised will have you horrified. I myself recently went through this, having bought a massage voucher from a local business called Wellness Therapy and dealing with the worst customer service from its owner I’ve ever experienced as I suffered through repeated cancellations, made calls only to never have my phone calls picked up, and sent emails only to have them go either unreplied or answered without a solution. The entire process of attempting to schedule this one massage — ironically, which I was hoping would be relaxing — ended up being so stressful that I feel like I need 20 massages just to recover from this disgustingly unprofessional experience. And guess what, I looked at Yelp and it turns out this place has had negative reviews for over two years now.
This is not LivingSocial or Groupon’s fault (in fact, their own customer service was excellent as they worked to get me a refund) — but there is an opportunity here to save the business model by only allowing quality businesses to be a part of their system. After all, what Groupon/LivingSocial provides is truly valuable — it’s a chance for businesses to tap into a whole new demographic that comes in because of a coupon today, but becomes a regular customer tomorrow if they enjoy the experience. That’s key though.
What I propose is: Groupon needs to create a vetting team. When a business applies to be a part of this platform, the vetting team gets to work, evaluating customer service, investigating the number of employees to ensure that the business can handle the uptick in customers it is likely to receive by advertising with Groupon, and doing an overall quality control scan.
With this process in place, negative experiences can be reduced significantly, which will lead to more people recommending up Groupon as a way to find quality local businesses. Existing businesses within the Groupon system should also have periodic reevaluations, keeping the quality control high.
Train existing businesses to uphold customer service basics. A quick scan of Yelp reviews will show you the number of customers who feel like they were treated differently because they had a voucher. This is unacceptable — not just for the customers, but for Groupon’s long-term success. If voucher clients are treated as sub-par, they will not convert other people to Groupon or use it repeatedly. That’s a lot of revenue dollars wasted.
What I propose is: When a business is accepted into the Groupon database, they are given an orientation training which includes things they can and cannot say to potential customers and stresses that they cannot discriminate against Groupon customers.
Mention that it’s against Groupon’s terms and conditions for any business owner to speak to customers with language that implies discrimination — and then also provide them with a toolkit on best customer service tips, ways to turn a Groupon customer into a regular, and make it clear that there is a complaint threshold, after which they will be taken out of the database permanently.
These are 2 core things that Groupon/LivingSocial can do to improve their reputation and business model fast.
With these two features working effectively, they can then market and build upon positive customer experiences in a variety of possible ways: live real-time videos of customers going into and experiencing a new business, business reward programs that give a bigger percentage of profit to businesses with high levels of customer satisfaction, digital campaigns highlighting the prestige of being Groupon-approved, and much more.
Thoughts or different ideas? Share them with me!