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Facebook Begins Testing Local Deals, Competing with Groupon
engine




msg:4304033
 11:18 am on Apr 26, 2011 (gmt 0)

Facebook Begins Testing Local Deals [news.cnet.com]

Facebook announced this evening it is ready to begin testing its new local deals offering--the social-networking giant's effort to cash in on the feverish interest in social buying.

First revealed in March, Facebook Deals offers members local deals they can buy and share them with their friends on the network. The test will launch tomorrow in Austin, Atlanta, Dallas, San Diego, and San Francisco, but may be expanded to include other cities, the Palo Alto, Calif.-based company said in statement today.

Users in the five test cities will be able to learn about offerings through e-mail and notifications, by clicking on the Deals tab on their Facebook home page, and through their News Feed when friends like or buy a deal.

 

engine




msg:4304080
 1:26 pm on Apr 26, 2011 (gmt 0)

At last, Facebook's blog page is up.
Deals: Better with Friends [blog.facebook.com]
A few months ago we launched Check-In Deals, to help you get special offers when you check in at local businesses from your mobile. Today we're going a step further and testing a new feature to help you find fun experiences to share with your favorite people: Deals on Facebook.

Initially, Deals will be available to people in Atlanta, Austin, Dallas, San Diego, and San Francisco and we hope to expand this test to other cities in the future.

Deals get social
While many Deals on Facebook offer discounts, it's more important to us that you find interesting experiences around you to do with friends. We've worked with partners and local businesses to help deliver the best social activities in your area. And once you've found a deal you like, having the deal on Facebook makes it easy to share, buy and plan with your friends.



[facebook.com...]

weeks




msg:4304088
 1:45 pm on Apr 26, 2011 (gmt 0)

This could severely damage or kill Facebook if not handled very, very carefully. And I don't think it will be done carefully because "local" is very messy. Local is full of puny wise-guys who don't know half of what they need to know.

jecasc




msg:4304097
 1:54 pm on Apr 26, 2011 (gmt 0)

I'd rather burn my goods.

Alcoholico




msg:4304211
 4:45 pm on Apr 26, 2011 (gmt 0)

Once again, fb has developed an original idea, I'm so so impressed!

travelin cat




msg:4304256
 5:08 pm on Apr 26, 2011 (gmt 0)

I saw the "upsell" for it this morning. I live about an hour north of San Francisco, and FB thought that I would care about things that were that far away. Not much savings would be had at current gas prices coupled with bridge tolls.

FAIL

Demaestro




msg:4304269
 5:24 pm on Apr 26, 2011 (gmt 0)

The trick to this service is good live customer service.

If Facebook can offer good LIVE human support like Groupon/Living Social they should be ok. If someone can't pick up the phone and get a person to talk to when there is a problem they shouldn't bother even offering the service.

Leosghost




msg:4304292
 5:53 pm on Apr 26, 2011 (gmt 0)

I'd rather burn my goods.

I just got wine all down the front of my tee shirt :))

walkman




msg:4304310
 6:18 pm on Apr 26, 2011 (gmt 0)

This a FAD, there's no way someone can afford to give away good stuff at 50% off and no large number of people go somewhere for a measly 10-15% (which is 30% off in reality for the store owner when you add FB's cut)

Demaestro




msg:4304342
 6:57 pm on Apr 26, 2011 (gmt 0)

there's no way someone can afford to give away good stuff at 50%


There are LOTS of ways.

Some businesses this works for, some not.

Think of a wall climbing place.

The lights are on, the equipment is on site, the staff members are there. It doesn't cost them more money if the place has 2 people climbing or if it has 50 people climbing.

Their cost doesn't go up with each person that walks through the door until they reach a certain benchmark.

For businesses with fixed costs these coupon services are great.

BillyS




msg:4304467
 10:49 pm on Apr 26, 2011 (gmt 0)

The lights are on, the equipment is on site, the staff members are there. It doesn't cost them more money if the place has 2 people climbing or if it has 50 people climbing.


If the above is true, then the company should lower their prices, rather than run specials that tick off their full price membership.

I signed up for Groupon and this thread reminds me I have to ask them to stop sending me emails. I buy stuff, lots of stuff all the time. I also like to support local murchants. I've yet to get an offer that I found valuable.

walkman




msg:4304481
 11:08 pm on Apr 26, 2011 (gmt 0)

What BillyS said
and I was talking about a sustainable revenue source . How many businesses are ready /willing /needing to give something at 75% off to justify a $25 Billion Group valuation and a gazillion million billion thousand clones?

A good business has no problem getting people at 50% off, they can skip the groupon fee.

Sgt_Kickaxe




msg:4304565
 2:10 am on Apr 27, 2011 (gmt 0)

I agree - groupon isn't the deal, it's the platform getting the deal to a visitors eyes. Facebook may be a much better platforum to accomplish that BUT if it forces it on members it risks losing those members. Tread lightly Facebook, Google is watching.

I miss the days when people were given what they asked for and not forced to look at what they don't want to see.

bakedjake




msg:4304591
 4:31 am on Apr 27, 2011 (gmt 0)

there's no way someone can afford to give away good stuff at 50%


What's your average order size?
What's your profitability on sales above the coupon amount?
What's your profit on shipping?
What's your benchmark for free shipping vs. your coupon value?
What's your unclaimed redemption rate?
What's your profit margin on product?
What's your customer acquisition cost through other channels (like Google PPC) vs. the amount of *actual* cash you're giving up with a half-price coupon ($50 in retail product value doesn't cost you $50)?

If the above is true, then the company should lower their prices, rather than run specials that tick off their full price membership.


What's the average order size difference between a new and repeat customer?
How many times per year does a repeat customer buy from you?
Would giving an "active" repeat customer an (example) effective 25% discount off average order size by way of a fixed amount groupon coupon incent them to buy just one more time during the year from you?
Can you attract previously expired customers through coupon sites as a way to win them back?
How much are you willing to pay to re-acquire a good customer?

A good business has no problem getting people at 50% off, they can skip the groupon fee.


A former moderator here, Chicago, had a saying about local data: "It's the distribution, stupid!"

The saying applies here.

Petrogold




msg:4304691
 9:11 am on Apr 27, 2011 (gmt 0)

Good discussions.
How a company offers so much % off on its products? What was the original cost & plus the mark up? Are they cheating their customers with so much % of profit or mark up value? I cannot concieve how it is possible. Is it cos China made?
Can we get a lesson from it? More discussions with valuable real feedback is appreciated.

jecasc




msg:4304696
 9:27 am on Apr 27, 2011 (gmt 0)


Can we get a lesson from it? More discussions with valuable real feedback is appreciated.


When I search for Groupon here in Germany i see a lot of people complaining that they couldn't redeem their vouchers because the stores have filed for bancruptcy in the meantime.

Groupon is either promotion or last straw before bancruptcy.

I have a strict "premium service but no discounts" policy. And that's one of the reasons I am still in business and some of my competitors not.

bakedjake




msg:4304776
 1:06 pm on Apr 27, 2011 (gmt 0)

How a company offers so much % off on its products?


I guess I approach this differently.

If I offer a $50 gift certificate at my store for $25, I get $12.50 cash (if I haven't negotiated the coupon site's take down, which you should do).

If my average order size of orders using those coupons is $100, then I've given them a 37.5% discount. ($62.50 cash in)

If my average order size of orders using those coupons is $200, then I've given them an 18.75% discount. ($162.50 cash in)

If my average order size of orders using those coupons is $300, then I've given them a 12.5% discount. ($262.50 cash in)

If the lifetime value of customer acquired through a coupon channel is 2x what it is from a PPC channel, would you be willing to pay 2x to acquire them?

Coupon sites aren't for everyone, but don't be so quick to dismiss them. We've found that lifetime value and AOS are higher from coupon sites than from Google PPC.

But you won't know until you test it. And start small - test it with 50 coupons. You wouldn't light up a PPC campaign with $10k in spend day one either. The great thing about these clone coupon sites is that there's lots of them that will do a deal with you for a small test (say 50 coupons) and you can negotiate their take down.

And there's an unexpected component to all of this - unredeemed. Our original models were built on a 10% unredeemed rate. We've found it's closer to 30%.

I have a strict "premium service but no discounts" policy.


We have a similar policy for customers that are in the "normal" marketing cycle. But we are willing to discount to acquire a customer (we see it as the same as paying a PPC channel or an affiliate to acquire a customer) or as an incentive in customer retention efforts after customers start passing pre-determined points in our expiration cycle.

Is it cos China made?


I don't see what the country of origin has to do with it, but if it makes you feel better, nothing of what we sell is made in China.

I assume you're trying to imply that the profit margins are higher or that we are dealing with low-value product and charging ridiculous amounts of money for it. In our case, we're in a higher end business, with rigidly enforced MAP pricing. We would not be in business either if we were out to lunch on pricing. We can't be too high because of the Amazon effect, and we can't be too low because our distributors would cut us off.

Demaestro




msg:4304834
 3:35 pm on Apr 27, 2011 (gmt 0)

If the above is true, then the company should lower their prices, rather than run specials that tick off their full price membership.


Are you for serious?

Companies have run coupons and specials for years upon years. You have never seen a sale before? Are you ticked off at stores you shop in when they offer discounts?

Marketers and business professionals have been offering coupons for years for various reasons but I guess some members here know better.

You have never heard of a store needing to liquidate inventory from the previous year to make room for new stock?

Is it beyond your understanding that there are valid business reasons for offering discounted services and pricing?

It takes some blind hate and a lack of creativity and vision to dismiss any reason for coupons. We have a member here proclaiming they would rather destroy their product then discount it. That makes no sense to me.

Perhaps coupons don't fit some people's business model, but there are thousands of legitimate reasons to offer coupons. Hating on places that have found reasons to offer coupons is really strange.

MasterSEO




msg:4307754
 12:08 pm on May 4, 2011 (gmt 0)

People in facebook are very innovative they come up with new new ideas which engage user on facebook. Great Idea..

walkman




msg:4307891
 4:43 pm on May 4, 2011 (gmt 0)

Demaestro, at some point you do cheapen your brand though. Human nature is not happy to pay $100 for something you just gave for $25 yesterday. That's how it is.

I went last week to buy a decent hand bag and was told: prices are the same everywhere, we cannot discount it because of the terms with the merchant. Now that's an extreme but you get the idea.

BillyS




msg:4308098
 1:49 am on May 5, 2011 (gmt 0)

Are you for serious?

Companies have run coupons and specials for years upon years. You have never seen a sale before? Are you ticked off at stores you shop in when they offer discounts?


I see supermarkets with coupons all the time. I "get" it, they're called loss leaders. Good idea to lure me in for cheap OJ, while I fill my cart with $400 in groceries. I don't see these offers on Groupon.


Marketers and business professionals have been offering coupons for years for various reasons but I guess some members here know better.

You have never heard of a store needing to liquidate inventory from the previous year to make room for new stock?


Are you serious?

Most of the stores I see taking this approach are nearly bankrupt. Yes, I see it...

When was the last time you saw an Apple product on sale? You want to compete on price? Go for it.

Giving away dinners at 50% off isn't going to make me eat three meals that night. And if I know a restaurant will give me a coupon like that, I'll never go back and pay full price.

Leosghost




msg:4308112
 3:27 am on May 5, 2011 (gmt 0)

<slightly OT because this is about adsense>

Almost all of the Groupon ads I see in France are for the same fast food MickeyD clone, "Quick" ( which is actually franchises whose parent is 100% owned by the French government's civil service pension fund ;-)

The ads are always a picture ( 300 x 250 ) of a burger with fries and what I presume is a bucket of coke..and the text is something like "great discount deals on a restaurant in your town"..it doesn't mention on the ad that is for "Quick" ..but like "Husky" ..I clicked ..but not on anywhere that is mine..It is for "Quick"

The Quick chain got very bad press here recently when a teenager died after getting food poisoning in one of their burger bars and the subsequent hygiene inspection found numerous contraventions of the relevant laws..

The chain has just finished a run of prime time TV ads that do not mention this ..but do insist on the strict hygiene controls they have..insinuating that others like McD and KFC may not ..which is ironic and chutzpah to say the least ..the French phrase used in reply to the ad campaign by most people .. translates as .. "they have a monstrous pair of *****" to run such ads !

Points are ..

#1.. They are not a restaurant ..they are a burger chain.

#2.. "Botulism in a bun" is still "Botulism* in a bun" even with a 50% discount on "normal price"..No thanks..merci, mais NON!

#3.. Given the "back story"..No one here is likely to eat there in numbers any thing like they did previously..and a discount pushed by Groupon and Google isn't going to change that.

#4.. Virtually no one is going to click on the ads ..

#5.. So any site that is displaying these image ads is not going to get any revenue from doing so ..unless it is CPM ( and we all know that CPM adsense, pays crap )..and the site is being associated against its wishes with a"tarnished brand"..because the vast majority of people the world over think that the site owners choose whose ads they show ..so they think that the site owner is deliberately advertising a company whose negligence just killed a teenager and the case was all over the TV news at prime time for weeks..really bad for the site..and you can't block it if you have image ads enabled..

Because of where I am .. and geo targetting ..I see this ad on sites in any language hosted anywhere and whose target audience is not necessarily French, nor in France.

English language report [foodsafety.suencs.com] on the affaire

*actually it was a staphylococcus bacteria ..but anyone who has worked in kitchens or catering or food hygiene knows "B in B" ;-)

Oh, and after the "exploratory click" I cleared the cookies ..so the fact that I still see it nearly everywhere doesn't mean its IBA.

</slightly OT because this is about adsense>

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