Social Media PR crisis - a Groupon fail

Social buying is a gathering wave with tantalizing  possibilities that remain largely untapped. There are so many potential win-win situations where businesses can gain customers and customers can collectively negotiate bargains of one sort or another.

Having said that, what prompted a disgruntled customer to say that her experience with social buying company Groupon was "the biggest mistake of her life"? Here is the  blog post gone viral that you don't want to see when you are the communications director of a social media dependent ecommerce company like Groupon.

So, what exactly is Groupon?

In their words:

Each day, Groupon features an unbeatable deal on the best stuff to do, see, eat, and buy in your city. By promising businesses a minimum number of customers, we get discounts you won't find anywhere else. We call it "collective buying power!"

In other words, Groupon is a kind of post modern coupon business that appears to be a good arrangement for all parties involved. But, to get a close up look both at how collective purchasing is a growing trend PLUS how social media can come back to bite you, read the blog post by Jessie, the owner of Posies Cafe in Portland Oregon and a former customer of Goupon,  in  which she tells her story.

She begins:

For months I’ve been thinking about whether or not to write a blog post about Groupon, and sharing the kind of experience it has been for the business. I’ve been weighing the possible repercussions of such a candid post as well, but after today, and having to decline a longtime customer’s Groupon for being past the expiration date, she asked that I share with everyone the reality of Groupon.

Jessie goes on to describe in detail how the Groupon experience turned into a near disaster for their business when a stream of heavily discounted Groupon purchases led to a large financial loss.

And how did Groupon respond to Posies Cafe owner who had characterized her experience with Groupon as "the biggest mistake of her life".

Groupon CEO Andrew Mason posted a response on his official blog with the remarkably tone death title 'Too much of a good thing?' which almost sounds like he is taunting the Posies owner. He reminds us of the job interviewee who tries to answer that question asking them to describe their weaknesses by saying that 'maybe sometimes they just push themselves too hard'. He does go on to allow that yes, their record isn't perfect,  there may have been the occasional incident of 'cupcake shops running out of batter' [as a result of using Groupon] but that he didn't address those on his blog in the past because they were so atypical and insignificant compared with all the companies they have helped.

Mason goes on: 

Finally, for what it’s worth, it’s painful for us at Groupon to read stories like this.
When we started this company three years ago, we were actually a platform for groups to organize action and fundraise  for causes and shared interests (one of which ended up being group purchasing). When we started Groupon, what got us excited about it is the win-win we’re creating – every day we’re breathing life into great local businesses, while at the same time making it easier for people to get out of the house and experience life. It sounds like corporate BS,
but the only thing that makes this worth doing is that we’re helping people. We’re extremely proud that most businesses consider Groupon the best form of advertising out there, but won’t rest until we've made Groupon work for everyone. We welcome your ideas!

Well, he's managed to add the expression 'BS' into corporate parlance but not to actually remove the substance itself from the content. This response is terrible, patronizing and not in any meaningful way taking any responsibility for the experience that his customer had.  He also adds, without going into any actual details that  "now that we know Posies had a problem, we have reached out to them so we can help".

Well, if that is true he doesn't actually explain in any way what they may have done for Posies.

Groupon and Posies also disagree on one very specific fact. According to Posies, Groupon would not allow them to cap the number of coupons they issued as part of the terms of their promotion. This would be a serious issue for any business - in effect a blank check to Groupon. However,  Mason denies that this was the arrangement saying:

"I’ve confirmed that this isn’t true – we never told Posies they couldn’t cap their deal."

This is a key piece of the original complaint by Posies and it is hard to evaluate their side of the story without knowing if this was, in fact, the policy. If Posies posts a reply to Groupons reply I'll review that here. Some actual transparency from Groupon might be helpful.

Finally, in the comments section under Andrew Mason's blog post a commenter accurately observed:

"The only thing this excellent blog post is missing is just a tiny bit of humility."

To which Andrew Mason replied:

"...we certainly recognize that we are imperfect and we are eager to learn. The only reason we’ve made it this far is by listening to and respecting each and every customer like they’re the only one we’ve got, and that’s not going to change."

Translation of that exchange:
Commenter: You're not listening, this isn't a real apology or explanation.
Groupon: We don't need to. We have always done everything perfectly and will continue to do so.

Mason basically explains away the whole incident by offering up other success stories and saying what a great service they offer.

He offers this video of an enthusiastic Groupon customer who approaches his Groupon promotion like a general preparing for battle.



Maybe Groupon is the best thing since sliced bread. But this response to a social media pr crisis deserves a C-. Groupon may dress the pig in lipstick - they maintain the appropriately cool blog with the CEO talking directly to customers and going through the motions of  responding to a significant social media challenge with a seemingly open and savvy social media response. But the substance of the response is lacking and the words ring hollow. The patronizing tone dominates their reply and does not help their image.

This picture is on the Groupon website on their About page with the caption,
The Groupon staff performs Bach BWV 248 No. 2 "Brich An, O Schones Morgenlicht" at the Chicago Lyric Opera, 10/27/09:

The Groupon staff performs Bach BWV 248 No. 2 "Brich An, O Schones Morgenlicht" at the Chicago Lyric Opera, 10/27/09

Mainsail through time