Nick's Tech/Multimedia Marketing Mash

Having been inspired by Tim Blonk’s excellent blog I’ve decided that maybe I should also go with a theme or category and center my thoughts around that. It might even make my thoughts a bit more cohesive and easy to follow! Wouldn’t that be great, :)?!

Now I just need to think of an idea that I care enough to write about for 8 more blog posts. That will come with time I suppose. But it had better come soon. Time is ticking…

Oh well. I guess I’ll continue with my theme of social media and the internet for the time being.

How is it that Groupon managed to turn something that was once considered dreary, old and outdated (coupons) into a internet phenomenon and inspire a plethora of copycat contenders? On top of that, they were valued at $2 billion within 2 years of commencing operations. That’s an impressive set of characteristics for any company to be associated with. On top of that they’re projected to to reach $1 billion in revenue faster than any other business (Weiss, 2010 – “Groupon’s $6 Billion Gambler”.)

So how does a company like Groupon hit that kind of high when they’re doing something as simple as offering a slight variation on an idea that’s been around for years? Using the power of social media and the internet, that’s how! The way that Groupon works is that it offers a new deal every day but it does it with a hook. There must be a certain amount of people who sign up for the deal before it becomes valid. This is what encourages the spread and popularity of Groupon. Picture this scenario.

One person sees an absolutely amazing coupon for a local store that they go to regularly and adore. They sign up for it but are informed that it hasn’t reached the required amount of people yet. Startled they reach out to friends who they think might be interested and tell them to sign up too. Those friends reach their friends and the web spreads outwards. Soon, the deal reaches its required number of sign-ups and the hordes are unleashed. The business gets inundated with customers and Groupon gets a healthy cut of the revenues.

Sounds like a great strategy right? Good ol’ word of mouth will never fail you. Except it gets better. The friend to friend concept gets amplified by being synced with social networking and Groupon now has a hook that draws people in as well as the people around them which expands the group that they are able to contact at no extra cost to them.

That combination of daily updates, great deals and social media has proved to be addictive to many and if recent success is an indicator they can expect that interest to spread and further their success. Now they just have to hold onto their market share by continuing to be innovative and keeping competitors from creeping in. We’ll see how that goes.