Data key to Groupon turnaround

For all the painfully honest deconstruction of his own performance contained in Andrew Mason’s resignation as CEO of Groupon last week, it was his candid admission that his intuition was often sidelined in favour of data that resonated the most.

Russell Parsons

In what is surely a contender for most memorable memo ever – “’I’ve decided that I’d like to spend more time with my family. Just kidding, I was fired today” and “ If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through”, just two examples of his wit and wisdom – Mason took the rap for the company’s share price hurtling southbound and stepped aside.

The final paragraph of the leaked memo, however, was a self-confessed failing Groupon’s new chiefs would do well to take note of – “My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers”.

In my last weekly missive I argued that data was not the enemy of creativity. That creativity coupled with data presents direct marketers with significant opportunities. Mason should have and Groupon needs to ally robust data and customer care to arrest its current decline.

Since Groupon burst onto the scene five years ago, the daily deals market has become crowded and fiercely competitive. Alongside the likes of Living Social, the space has been occupied by established brands such as Nectar and Amazon all promising unbeatable experiences at unbeatable prices.

In short, the market has become commoditised with brands struggling to stand apart in the rush to sign-up as many people as quickly as possible. The reasons for Groupon’s success are the same as they are to explain its recent woes – its business model is easily copied.

Groupon has recognised this to a degree, switching marketing spend from acquisition to retention. In addition, the company needs to know its customers better and the only way to achieve this is through data insight.

Groupon needs to offer experiences attuned to needs. Its approach to emailing in particular is often a little scattergun – send as many emails to as many prospects as often as possible and hope somebody somewhere bites. Less focus on adding numbers and more on richer experiences is required. More personalisation will lead to more from the same customers. Let the newer entrants scramble for the occasional and low-yield customers.

Both intuition and data are required for the company to flourish.

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