Thursday, September 10, 2009

Groupon, Livingsocial, and digital norms

Regular readers have noticed that I am a bit of a social media junkie -- this blog, Facebook, Twitter -- but I am also intrigued by social media sites that are set up only for commercial purposes. It is fun and instructive to watch the evolution of these sites.

Along those lines, a few weeks ago, I wrote about Groupon. The concept: The retailer offers a discount deal in the city of your choice, but only if enough people sign up for it. The viral power is amazing, because after you sign up for something you want, you contact all your friends asking them to do the same so you can get the deal. Meanwhile, the retailer gets noticed by people with an affinity for his/her product or service, and gets a bundle of cash in prepayments. The folks at Groupon get some kind of fee. Everyone is happy

Now arises a new site, soon to go into business, called Livingsocial. Like Groupon, you can sign up for the deal of the day, and if enough people sign up, the deal is on; but unlike Groupon, if you get three other people to sign up for the deal, you get your coupon for free.

I'm not sure, but I do not think this last feature is going to catch on. I think people will be reluctant to try to get their friends to sign up for a coupon so that they can profit from the experience. I think friends, too, will be put off to think they are being "used" that way by their digital buddies.

One of the things I have learned about social media users might seem a bit paradoxical. People value their privacy. Huh? People who expose all on their blogs, Facebook pages, and Twitter feeds value privacy? Well, yes, in certain respects. They don't like receiving commercial spam, even from their real friends. I wonder if the Livingsocial model will feel like it violates that cultural norm.

Time will tell, but in the meantime, please offer your thoughts on the matter.


DrV said...

Just like refer a friend didn't work before SM, this too is doomed to go bust. No one likes to coopt their friends ... even for a deal

e-Patient Dave said...

Coupla thoughts.

1. > Regular readers have noticed that I am a bit of a social media junkie

a. Y'think?
b. Can you say "tautology"? (different and dissimilar words that effectively say the same thing twice)

2. re social people wanting privacy: To me this is clear - people go to a party because they're social and they like contact, but that doesn't mean anyone at a party is saying "Yo, hit on me! Use my presence however you like!"

(Well, SOME of us DID mean that when we showed up at a party. But still, it's Not Cool to infer permission from presence.)

mdspencer said...

It's going to depend on the quality of the coupons and whether they understand that women are social shoppers but men are not. So if the coupon is the same 20% off one item that I have in stacks already, I am not going to enlist my friends. But if it's 20% off the whole purchase at a restaurant we would all go to together, then I would.

Still - nobody likes a greedy friend. I'm not going to buy something to help a greedy friend get it free, unless she is sharing in her largesse. Ick.

Prediction: all depends on how many attractive group opportunities they offer.

Lisa.P said...

This time, Paul, I'm not sure I entirely agree.

The added value of social media is trust - the same value that ties our real-life social networks together. I trust my friends not to spam me; they have the same trust in me. If either of us behaves differently, our unspoken social contract is broken.

Given that, I don't envision folks in my own network sending me an offer solely for their own profit. I would like to think they would consider whether or not this offer would be something I enjoy.

To that end, I would view it more as a kind thought than anything else. The free coupon is an incentive to think about others at the point of more; no less.

And if I'm not interested - there's always the delete button.