Groupon, successful as it is, has two challenges: getting more businesses into the active deal pipeline (they have a backlog waiting) and making deals more “relevant” to consumers. Companies such as Yipit aggregate lots of deals and enable consumers to create preferences so that they’ll only see deals they’re interested in.
Groupon by contrast is going to improve relevance through active and passive personalization: a mix of preference selections and behavioral targeting (through buying history):
Login to Groupon and click “My Profile” to enter your preferences so we know enough to send you deals that match your tastes, and grant ourselves power of attorney. Like a baby, Personalized Deals will start out dumb, but like a baby dipped in some sort of mutating ooze, Personalized Deals will get smarter quickly. As Groupon gets to know you better, we’ll target your inbox with scarily accurate deals and scarily accurate hand-drawings of you.
In the press release Groupon CEO Andrew Mason is quoted saying, “Interest in Groupon is so high we can only feature one out of eight businesses that contact us . . . Personalized Deals opens Groupon up to more merchants, who until now have been forced to look elsewhere to find new customers.”
As an aside, in addition to personal preferences Groupon is seeking demographic data. It will thus be able to segment (its participating) audience by preferences, buying history and income, education, marital status, etc.
This move helps Groupon address the rise of competitors as well as deal with the problems I identified at the outset. Groupon President Rob Solomon told me some time ago that there were literally thousands of businesses that wanted access to Groupon, but there was a bottleneck because of the one-deal-per-city-per-day model. He also told me that Groupon was on track to do almost $400 million in revenue this year.
It’s scary how fast this daily deals phenomenon has grown. But beyond that, according to Yipit’s data, more than 90% of SMBs that have used these types of services would do so again.
If you consider that in the context of churn for other SMB marketing products it’s pretty amazing.
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There’s some additional discussion on Techmeme.
September 2nd, 2010 at 11:55 am
[...] is now offering neighborhood level deals. Like Groupon personalization, this move represents an evolution of the model toward greater consumer relevance. Obviously [...]