Facebook added a new member to its board in September and I missed the release. The cast of characters on the board of arguably the planet’s most powerful social media company is a bit scary because it implies the movies we watch and the sites on which we connect are controlled by a handful of men.
Erskine Bowles, President emeritus of UNC and co-chair of Obama’s National Commisson on Fiscal Responsibility and Reform. He is also on the board of Morgan Stanley. Under Clinton, he at different times served as chief of staff and administrator of the SBA.
I didn’t try to buy LinkedIn shares and I don’t want Groupon stock if the company proceeds with an IPO. I’m not going to tell you about P/E and other valuation stats. I’m hoping to learn how to do that in time, as I’m attending Babson’s Evening MBA program. For now, I choose stocks based on their revenue stream(s) and potential to consistently lure American consumers.
One Hit Wonder? I by no means am not appreciative of the major trend Groupon started but how many Groupon purchases turn into repeat business? Many articles have covered the fact that businesses take a hit with Groupon and lose money on the Groupon coupon because they are hoping to get new loyal customers. I’m guessing it rarely happens.
My experience with Groupon was limited but for a business my guess is it’s sort of like getting featured on Oprah’s “list” but minus all the real sales. You get that flood of business except the income doesn’t cover all of your costs. You’re scrambling to accommodate all the buyers and then because of the number of Groupons sold, you end up having to extend the expiration date. More appointments filled at a loss…
Time is Money. Groupon rarely actually features spas and restaurants near my house or place of work, or that I regularly go to. I get it that that’s the point—to drive new business to other places. But the thing is, Americans are all about 1) savings & 2) convenience. Even the savings won’t be worth it for many if it means sacrificing time.
Buyer’s Remorse. I bought three Groupons. Two to a local semi-upscale restaurant thinking I’d use one and give one to my parents. They never used theirs. $20 bucks gone. Then I bought a $60 Groupon for a spa in Cambridge for a mani/pedi/massage. That spa got flooded with purchases, extended the expiration date, and ultimately we couldn’t find dates to fit both of our schedules, so they told me to request a refund. They were extremely patient and accommodating, so I will consider using them in the future, but the point is, the spa was outside my usual routes so it felt like I had to schedule extra time for travel. I know that seems a bit nit-picky but businesses need to know that Americans want it all for VERY little money!
The New Marketing Ploy. Would I have gone to the restaurant and spa had they not worked with Groupon? Eventually but not when I bought the Groupons. Meaning, this may be just a sophisticated way of luring customers. Like when I tell my friend, BR just gave you a coupon so you’d come back and buy more. But you don’t need more! Too bad, they are preaching to choir and I’m the bad friend saying don’t spend more. Well guess what, I bought into the Groupon sales pitch for a bit, but the honeymoon period has worn off and I’m no longer sold.
Ultimately I think Groupon is a great idea but with competition growing, I think they need more “deals.” The AP video has Founder Andrew Mason saying that the solution to overselling and overwhelming businesses using Groupon, which can then lead to sub-par ratings on sites like Yelp, is their planned neighborhood rollout, which would limit the number of people seeing specific deals.
As for LinkedIn, social media is a necessary evil but its ROI is very hard to track. Where is Twitter storing the data? Their site often crashes and they are likely losing data to all the third-party companies that created free web-based Twitter management systems, such as CoTweet and TweetDeck. Following my recent Babson class, I now know these are data companies not just software companies. I guess I should ask, given my recent OB & IT class, how LinkedIn and Groupon are gathering user data and how they plan to profit from that data in the future?
I’ll close with this. When discussing gaming and social media, one of my professors, Bala Iyer, said this of Zynga (Farmville) : it’s an “analytics company manifesting as a gaming product.”
Connections are the new wealth; isolation is the new poverty.
This Bloomberg video touches on the use of social media in the business world. My experience was that every company knows they should have an online presence and should use social media to engage and communicate with their consumers, but most don’t know how. In my opinion there are two routes: hire student interns (translation: free) b/c they automatically communicate via new media technologies, or hire professionals for a hefty price tag that will either manage your social media profiles for you or charge you for their “data mining” application.
