Greg Sterling asked the question, “Is Groupon the new Yellow Pages”, and then went on to make compelling argument as to why Groupon could indeed be seen as the “new” yellow pages. Basically the analogy is that in the glory days YP owned all the content, sales and distribution. Today they no longer have exclusivity to these things and it is possible that Groupon, within their model, owns these in deep and meaningful ways.
Greg’s post got me thinking about the sales, content and distribution aspects of Groupon.
- Sales. Groupon has spent considerable effort developing a sales force. Direct feedback from SMB’s I have spoken with indicate Groupon’s sales people are pushy, but they are certainly effective. Also, at least in our neck of the woods, sales are done via telephone and not in person. This is a big advantage for Groupon both in cost and in scale. The more successful they are the more effective this strategy becomes. There is no question that Groupon controls their own sales channel.
- Content. What exactly is the content? Well it is mostly the deal itself but is is also the innovative description of the business and the wacky stories them make up and associate to businesses. The deal content is clearly owned by Groupon.
- Distribution. This, in my opinion, is the key to Groupon. They have perfected the art of building, and working/selling, an email list. Groupon uses the deal content, which is extremely valuable to consumers, to build an email list. They leverage the idea of group buying and referral fees to get consumers to recruit subscribers for them. Then, they take the email list and pimp it out to businesses guaranteeing them a certain amount of business in exchange for a great deal for consumers. The great deal in turn brings them subscribers. Wash, rinse, repeat. Their success allows them to own the list exclusively. The do not share the list including the deal buyers with the businesses.
So if owning sales, content and distribution defines the new Yellow Pages then Groupon could certainly be it. My question is simply, does it have to be this way? I think there are many entities out there that could give Groupon a run for their money, if not in the near term, certainly over the long haul. Many companies have broader distribution they just have to figure out how to harness it and share it with SMB’s.
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