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I somewhat recently read an article about a London bakery who offered a Groupon deal for 75% a dozen cupcakes. They had 8,500 people sign up for the deal, a staggering number for such a little bakery. One would thing an influx of customers like this would be a good thing for a company. It sure is, when the company is large enough to handle a larger-than-expected swell in customers. Need A Cake, the aforementioned bakery, was not at all prepared.
Dubbed her “worst ever business decision,” Rachel Brown and her staff needed to make 102,000 in a short amount of time to handle the orders. They couldn’t handle it on their own and were forced to hire 25 extra workers, resulting in a loss of $3 per batch of cupcakes equaling a $20,000 loss for the company. Needless to say, this type of incident is not the first of its kind, but should be the last. Why? Because small businesses need to understand Groupon, and Groupon needs to understand small businesses.
While working in social media for the last 14+ months I have learned a lot about marketing on social networks and how different companies approach the process. The smart ones focus on building relationship and creating engaging content to keep their fans and followers around for an extended period of time. The not-so-smart ones want to win the “I have more fans than you” battle. Here’s the thing: if you want fans, it is very easy to get you those fans. Put up some money and we can advertise the hell our of your business and reach your fan goal. But guess what? Those fans, aren’t fans. They will not promote your product to their friends and family. And they most certainly won’t be loyal to your business.
Groupon is an offline version of the Facebook brand media buy. And that’s a big issue. For big businesses it is fine because they already have large customer bases that are loyal to them. For small business it can be devastating. A small business is attracted by a group deal because they believe it will bring them many long term customers they may not have reached otherwise. Believing in this is a mistake. Sure, you will get a few, but the percentage of lasting customers versus one time deal seekers will be very small. And this is Groupon’s biggest folly…they don’t actually help businesses. Big businesses can handle the losses they incur from running a group-buying deal, but small business can potentially be shut down because of the money lost from a deal.
Rarely does a business do a Groupon deal twice. I have yet to see one (if you have, please tell me in the comments) occur. There is a reason for that. A great business that opened up entirely new market to the world didn’t understand the scale of what they were trying to do. It’s unfortunate, because it’s possible that they could help small businesses. Even putting a cap on the number of people that can purchase a deal would help, as it would provide an “exclusive” label to each deal for small businesses that make them more intriguing, and could get people to visit the business even if they missed out on the deal.
For Groupon’s sake, I hope they figure out a way to change their business model. Otherwise small businesses everywhere could be in trouble.
One thing I’ve noticed over the last year or so, while working in social media, is that Facebook is the one company that never really seems to take a hit. Sure, they have a terrible customer satisfaction rating (like that ever really hurt them in the first place) but it isn’t like they are losing customers because of it. When you’re a company with a user base of 800 million people, you’re big enough to take risks that may hurt the user experience without having to worry about losing those users.
The average American spends 6+ hours per month on Facebook, and that’s a number that’s increasing every month. The amazing thing about Facebook, to me, is that it seems to be immune to the “extra step” barrier that many websites, surveys, and advertisements have run into over the years. What I mean by this is, whenever you are designing a user experience you want as few steps as possible for the user to take. You will lose the attention of the user for every step they are required to make for them to reach the end-goal. The magical thing about Facebook is that users don’t mind taking an extra step or two that they would be unwilling to make elsewhere on the internet.
But why waste time with these extra steps. Facebook should get a browser. Or, at least, get a skin for current browsers that includes all of the functionality of Facebook, without having to be on the website. A little over a year ago I had the opportunity to meet with some guys from Brand Thunder, a service that designs and customizes browsers. For now they have done browsers for sports teams, universities, and large companies. For example, if you installed a browser for your favorite sports team it would have a sidebar that has a stream of news and information on that team that updates in real time and is skinned with that team’s colors and logo.
Now imagine something like that, but with Facebook. Instead of having to always go to Facebook.com to see your notifications and messages, or to see who is available to chat, what if it was in your browser? Stop getting distracted with your news feed and wasting time on the website, but still get all the important stuff. If you’re on another website and want to share a video you see with a friend, just check the sidebar to send them a message rather than going to Facebook and see if they are online.
We all waste time on Facebook when we probably shouldn’t. It has become such a focal point in our online lives, that it’s become more than just a website, it defines who we are in the virtual world. A Facebook browser would not only save us a lot of time, but it would improve the user experience dramatically. There would be space for advertisements as well, which would help quell any worry about Facebook losing advertising dollars.
What do you think? Is a browser too much for Facebook, or is it a necessary step in Facebook’s evolution?
The ever-escalating battle between Facebook and Google Plus for social networking supremacy has reached a new level of competition in recent days. Facebook has revealed their next slew of changes that includes an overhaul of user profiles with the new Timeline profile, their new Open Graph API, and the ticker. Google Plus has finally made their social network available to everyone, gotten hangouts onto mobile phones, and allowed big audiences to view hangouts (beyond the maximum of ten people actually hanging out).
For the first time ever Facebook has serious competition (well, not too serious) and it has forced them to really think about the service they offer. On the other hand, Google jumped into the game years after Facebook established dominance and it has forced them to act quickly and to be innovative in their approach to social networking. However, I believe Facebook is going to either: 1) smother Google+ because they are simply THAT big, 2) force Google+ to reconsider their target market and become more of a niche social network, or 3) simply just stop worrying about Google+ and keep doing their own thing.
While the social networks continue to change, adapt, update, and fight for users’ time and money it will only stand to benefit us users. The recent changes made to both Facebook and Google+ make both networks easier and more fun to use, but I think Facebook really “gets” it better than Google+ and their recent changes show that.
How will these changes benefit you (the user) in the long run? Social networking is becoming something more than just a way to keep in touch with friends and stalk people you met the night before at a party. Facebook, and at some point Google+, is becoming a social aggregator that takes everything you do and puts it all into one place. It is the ultimate sharing tool. The new Open Graph technology is incredible. From personal experience (and some insane numbers) the new API is going to brush off everyone’s complaints about privacy and turn the internet into a cohesive community that shares everything. (And let’s be honest here, if you complain about your information being shared, DON’T put it on the internet in the first place, because it isn’t just Facebook and Google tracking you.)
Connecting with your friends now brings you more than status updates, relationship status changes, and photos. You now can see what your friends are listening to/watching/doing and choose to listen to/watch/participate in real time with the click of your mouse. It’s amazing to share so much with friends. There will always be people terrified of sharing so much, but in the end it develops relationships with people which is what social networking is really all about.
When Google+ first released my initial thought was that they tried to combine the best of everything into one network. They had Facebook’s layout (almost identical), Twitter’s real-time sharing capabilities, and Google is connecting all of their services as well. Seems like it would be a perfect storm to attract users. Instead Google+ is still floundering (or close to it), with not many active users. However, Facebook is learning from Google’s mistakes (that they made trying to learn from Facebook…it’s a vicious cycle), and creating one hell of a social network. They’ve add “Subscribe” which is their version of Twitter’s “Follow.” They are making friend lists easier to make and update…and are auto-populating lists for you! Which is something Google+ didn’t do with Circles (big mistake). They are banking on the nostalgia the scrapbook-esque Timeline will bring to users. And it’s going to do well. Users will hate the change, then get used to it, then love it. Just watch.
The competition that Google+ has started (for lack of a better word, because they can’t technically compete with Facebook right now), is the best thing that could have happened for us users. Facebook is now making changes that benefit us and aren’t just layout and design changes. The user experience is getting prettier, more intuitive, and more fun. We have a lot to look forward to. And I can’t wait.
Facebook has been going through a lot of changes recently because of the direct competition felt by Google+. We’ve entered a bidding war in which the prize is the social media crown. Google+ has flaws that will stunt its ability to grow, but some of the features have a lot of potential. Circles is one of those features. While primitive at the moment (you have to constantly update and maintain the circles manually, and drag and drop hundreds of people into the correct circles on your own), they give users the ability to share content to very specific groups of people. And this is where G+ really is attempting to one-up Facebook: sharing. Combining Circles with a real-time stream that is similar to Twitter, Google+ is attempting to make simple what Facebook could not. Until now.
Facebook has recently released their new sharing tools that allow users the sharing capabilities they have always wanted. Rather than explain it all to you, scroll down through the screenshots of the tutorial Facebook (very wisely) set up to explain the new changes:
The biggest change is #4, the inline audience selector, that allows you to choose who sees your post right from the status box. I see this as a direct response to Google+ Circles, albeit a less pleasing version (aesthetically speaking). However, the ability to create these lists that are so similar to circles has existed on Facebook for awhile, but hasn’t been visible. Facebook finally making this option easy to use, and find, is a huge step forward for the social network. This, along with a more streamlined, easier to use privacy page makes the privacy concerns of Facebook seem like a much smaller issue.
For more information on Facebook’s sharing changes feel free to click through here.
What do you think of Facebook’s changes? Are they trying to be too similar to Google+ or are they a step in the right direction?
Facebook’s newest addition to its repertoire of ways for brands to connect to consumers on their site involves a little website called Klout. For those who don’t know:
“Klout isn’t about figuring out who is on the “A-list.” We believe that every person who creates content has influence. Our mission is to help every individual understand and leverage their influence.”
Klout ranks your activity online (right now on Facebook, Twitter, and LinkedIn) and awards a score based on said activity. It’s a clever concept that has become a measuring stick for those who rely on social for their careers to measure how they are performing.
The Facebook integration of Klout opens some new doors for brands to have some fun with their pages, and award consumers content dependent on their Klout scores; the higher the Klout score, the better/more content, deals, and/or offers one, presumably, receives.
The new system is a product of the geniuses at involver, and it is one doozy of a way for brands to encourage their fans to start being more active in social media. The process is fairly simple, as shown here via the Audi USA Facebook page:
Step 3: Reap the rewards of being socially awesome!
The key takeaway from brands on Facebook: You now have a direct way to reward the greatest influencers on the internet. Paid versions of the program allow customization to reward different levels of Klout scores different prizes. Give the low-cost coupons and deals to those with a decent Klout score, then reward those with massive influence with incredible prizes and experiences. If I am unexpectedly given an awesome experience or prize from a brand that I like I am going to blog about it, post pictures, tell all of my friends (both online and offline), and make a huge deal out of it. If I am a celebrity or public figure that has a lot of influence, what kind of effect do you think this can have for your brand?
As you can see in the screenshot above, I have a Klout score of 44…nothing to cry home about, but I did get a cool wallpaper out of it. For those of you with more Klout, try out the Audi USA thing and post what you were given in the comments! What do you think of the Klout integration, is it a great new marketing platform, or just another crazy integration?
The social networking giant’s first “bad” news since the privacy issues arose may not be so bad after all. Recent reports have shown that Facebook lost users in significant amounts in the US and Canada, while also losing users in the UK, Norway, and Russia. Does Facebook have anything to worry about? Of course not.
The company is still on track to hit 700 million users in the next couple of months (probably in less than two), and losing users in the countries that were early adopters is the natural order of things, a cutting out the fat type of thing. Thing is, when you grow exponentially as Facebook as done in the last 2-3 years you are expected to get a lot of fake/spam accounts as well as people who are just trying it out because it’s what everyone else seems to be doing. Once the fake/spam accounts get deleted, and the “just trying” users realize Facebook isn’t their thing, they duck out and aren’t heard from again. This leaves the people that really matter, who use the product.
In my experiences dealing with Facebook, and running Facebook pages for brands, there is a difficult balance a page must achieve: you want to gain fans and increase your numbers as much as possible, while also making sure the people on your page are getting your content and listening to it. The most common problem I see with pages is that the primary goal is gaining fans; instead pages should be gaining fans. This type of mentality can be applied to Facebook as a whole. It’s great to be able to say you have 700 million users; that would be the third largest country in the world, and roughly 10-15% of the world’s population all on one website. But then if you read statistics like 50% of active users log onto Facebook in any given day, well, where is the other 50%? A good number of that other half is complete trash; utterly useless beyond them being a stat booster.
So what’s my point? It is that Facebook losing users in the oldest markets (oldest in terms of how long ago Facebook was available) means that the accounts that Facebook doesn’t need, or at least shouldn’t want, are being deleted. Would you rather have 200 million people in the US on Facebook, with a quarter of that being people who are inactive and bringing you little value, or have 100 million solid user who are on Facebook for hours every week engaging with each other, your brands, and your advertisers? I don’t think I have to answer that for you.
I, for one, will be happy to see the spammers and inactive accounts leave Facebook. As a community manager it means that when a page I run gains new users it means that there is a higher chance of those users being people I want on my page, rather than a simple statistic.
What do you make of Facebook’s decrease in users in these major markets? Is this a good thing, or is the beginning of the next MySpace fallout?