Groupon, Livingsocial, and digital norms


Regular readers may 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.

Paul Levy is the President and CEO of Beth Israel Deconess Medical Center in Boston. He blogs about his experiences at Running a Hospital, one of the few blogs we know of maintained by a senior hospital executive.

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ContusSue Copeninginchoate but earnest Recent comment authors
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Thanks Sue Copening!This is a great post for businesses in today’s economic trying times!

Sue Copening

Both these concepts are brilliant (though not new) as they are a win-win-win. Living Social has added an extra incentive for people to share with their friends, but Groupon is also counting on that as well… hence the “threshold” before the deal is “released.” The only difference is that Groupon is playing “take away” – “we will take the deal away from you if we don’t sell enough.” That could work against the merchant who, obviously, WANTS these new customers walking in their door. As for “privacy” …as long as the companies do not collect and spam the email addresses… Read more »

inchoate but earnest
inchoate but earnest

It seems that the livingsocial application could aggregate like requests to generate a qualifying group, without active effort on any individual requestor’s part. Then, simply ask the group members to affirm their transitory affinity. Lose a member, & fall below the qualifying threshold? Allow members to reach out for a new member at that point. Livingsocial could then parse their users by the extent of their activity/passivity in assembling a qualifying group. The point after all (as I understand it) is to group people around their common interest in the product/service at hand, rather than principally whether they are roommates/neighbors/2nd… Read more »