Seth: On Groupon His View
My Groupon post yesterday dealt with potential pitfalls for business owners considering the use of Groupon as a marketing strategy. I referred to couponing as the crack cocaine of advertising because of the quick hit nature and the fade effect…thus the need to increase frequency of use.
Interestingly enough, Seth Godin penned an article this morning (High Margins, Groupon and the magic basket for price differentiators) on how you could use Grouponing without conditioning customers to be price shoppers. Seth calls this the magic basket:
And the magic basket? Tim Ferriss just finished offering more than $1600 worth of high-margin items in a basket to people who bought 30 copies of his new book. The marketing partners get trial among a group of people who are each paying more than the cost of a single item in the basket, these customers are proving they’re not among the ultra-cheap. And the products are quasi-aligned, appealing to the same sort of consumer. Is there a cheaper way for one of these companies to reach this precise person? I’m not sure there is.
Imagine taking this even further and leaving out the book part. A basket of aligned items, all high margin, none from the market dominator, each holding out the possibility of future business… You could do this with an 8 pack of computer games or phone apps, or drink coupons from a dozen bars in the same town, or even clothing for guys size 38. Alex has experimented with this at Swagapalooza. I’m betting that there’s quite a lot to be done in becoming this market creator/differentiator/middleman.
Seth also comments on the inability to collect data as a key missing ingredient. He also suggests that despite the inability to collect data this method of advertising could be an opportune way to develop a community. Read Seth’s full article here.



