Groupon Stock Drops 12% As Customer Refunds Increase

While other IPOs such as LinkedIn and YELP have had tremendous recent success, social buying startup Groupon has been on a bit of a roller coaster ride and it looks like they just went over a steep drop.  The stock is down over 10% today on news that four-quarter revenue and income is down due to a higher than expected number of customers asking for refunds.
Groupon is a social buying service that allows users to buy specific items at discount as long as a large number of people participate in a given deal.  For example, a massage parlour can offer 30% off their regular price, as long as 100 people purchase the deal.  This incentivizes users to invite their friends to participate in the deal, and if the 100 number is hit, the deal is activated.
The problem is that a lot of businesses have not prepared themselves for the influx of customers, and the poor service has sometimes led to users demanding refunds.  Another anecdotal reason for the refunds is that the deals are often so enticing that people begin to hoard massive numbers of deals, but then realize they probably won’t need to cash in on 6 massages in the next few months.  Read more about the refund issue here.

As we can see in the chart, the stock began to rebound after a big hit in November during the IPO, and had reached heights above 20.  As reported in MarketWatch, Justin Post of Bank of America/Merrill Lynch had recommended a buy on the stock, but the company has not performed as well as hoped.

“Groupon has been our most disappointing call in 2012 as we thought 4Q margin upside, a rebound in 4Q take rates, and data suggesting an improving competitive landscape would improve sentiment on the stock,” wrote Justin Post of Bank of America/Merrill Lynch in a note to clients on Monday.

This is a far cry from when Google was attempting to buy the company at a valuation of $6B, although today’s price does have its market capitalization at $8B… but that number is falling fast.

4 Simple Ways to Find Out What Your Customers Really Think

It turns out there’s a really simple way to cement customer loyalty—ask them what they think. In a recent survey from Cint, 62 percent of consumers say they would be more likely to purchase a brand’s product if the company asked for their opinions. And more than half say they’d be more loyal to the brand as a result.
Surveying your customers can benefit your business in many ways. You’ll gain insights to help you improve your product or service, find out what customers actually think of your business compared to your competition and be better able to target their needs.
In today’s Yelp-review-driven world, consumers increasingly expect to be asked their opinions: 77 percent of them believe companies are more interested in what they think than they were 10 years ago, and 69 percent believe businesses actually act on their advice.
So how can you conduct a survey that gleans useful results? Here are some tips.
Get online. Consumers overwhelmingly prefer tech when it comes to surveys; 91 percent cite “smartphone,” “Web” or “SMS” as their preferred methods. Just 4 percent like mail in surveys, and a mere 1 percent want to be surveyed by phone. There are many low- or no-cost online survey tools out there. Zoomerang is one I like that lets you do surveys online, on Facebook, or by mobile device and offers both free and premium plans.
Keep it short. How many times have you started to take an online survey only to get bogged down in a seemingly endless series of screens? The Cint survey found shorter is better. Forty percent of consumers will spend one to five minutes taking a survey; 30 percent will devote up to 10 minutes; and just 13 percent are happy to spend over 20 minutes. (I’m surprised that number is so high.) Remember, people are busy, so keep it short and simple.
Offer incentives. If your survey is short and focused on a topic (like customer satisfaction) that customers believe will ultimately benefit them, you may not need to offer a reward. But if you’re conducting a lengthier survey or doing market research to assess a product or service launch, some type of “carrot” might be necessary. Money (no surprise) is the best motivator for 55 percent of the respondents in the Cint survey, while 34 percent want free products and 6 percent are okay with vouchers. (If you offer a chance to win a prize, make sure you are following contest/sweepstakes rules in your state.)
Act on what you learn. There’s no point to doing a survey if you ignore the results, and keep doing what you’ve always done. Plus, in today’s socially-connected world, people who’ve taken the survey are likely to talk about it. Assess your survey results and use your customers’ feedback to make changes where they’re needed. Even if the results show that your customers are happy, you’re not home free. You need to regularly poll your customers to keep them satisfied.
Photo credit: Photos.com

The Wrong Way to Market Social Media

Entrepreneur Kevin Ready tells a sadly humorous social media story in his book StartUp: An Insider's Guide to Launching and Running a Business. The airport parking company that he uses has a shuttle bus that runs from the lot to the airport terminal. Plastered on the bus windows are posters that say: “Like us on Facebook. Plus us on Google. Follow us on Twitter.”
"This makes sense doesn’t it?" asks Kevin. "Not. Let’s break it down.
A. Somebody at the parking company has been tasked with the job of handling social media.
B. Second, that person’s boss has probably established some sense of the metrics in the space: likes, plusses, and follows.
C. Since this is what the social media person is being measured on, he or she creates the sign as described and posts it in the bus.
D. The irony is that they've 'missed the bus' with the marketing collateral that she just made."
Sadly, this is how many small businesses are marketing their social media in an attempt to build an engaged following. So what’s wrong with it?
"Simple," says Kevin. "They're telling customers what the company wants. Why would any customer ever care what the company or someone's boss wants? Why, why, why? I would not be surprised if out of 50,000 customers per month in those busses nationwide, not a single one ever responds to this poster as it is written."
Every company needs to compose messages that get customers to do what the company needs done. But you shouldn't confuse your need with the customer's.
So what should the company have done? Kevin offers a three-point strategy:
1. Start with “why.” Under what circumstances would customers ever want to interact with messaging from her brand? What do they need? What are they interested in?
2. After identifying possible whys, evaluate your resources and see how you can provide a solution to one or more of them. This is the process of building a value proposition around that why. The mantra here is, “Provide value. Provide value.”
3. Finally, follow up by attaching the desired actions (in this case, like, plus, and follow) to that value proposition.
How about these?
“Get one free day of parking! Just ‘like’ us on Facebook to receive your coupon.” (Value plus desired action)
“Love Hawaii? So do we! We are sending two lucky families to Oahu—just follow us on Twitter and we will enter you to win!” (Value plus desired action)
“A lizard in a suitcase? The funniest travel stories ever told—only on our Facebook page.” (Value plus desired action)
By providing value, and arranging the message in such a way that customers who are interested in the value do what you are asking them to do, you greatly increase your chances of getting customer buy-in.

Eight Easy Ways to Boost Your Website on a Budget

Call me the website fairy. I know the last New Year’s resolution on your list is to revamp your website. You're most likely putting it off because you work too many hours, can’t afford a designer and you tense up every time you think about it.
The following tips from small-business owners will make your site discoverable to potential clients and attractive to a multiple-visit viewer. These ideas won’t cost you a dime or take forever to accomplish.
Boot-up your printer.
Blog strategically
If you don’t have a blog attached to your website, now is the time to set it up. Log on to WordPress and create a blog for free. Then, link the blog to your website or incorporate it by adding an extra page to your toolbar (YouTube tutorial).
Now that your blog is set up, what will you write about?
Write Q&As on influencers in your industry, suggests Rusty Shelton, founder of Shelton Interactive. If you're launching an accounting firm, reach out to accounting professors in your area and ask to interview them. Ask them about the latest accounting trend or related news, and transcribe the interviews into blog posts. Ask the professors to link their own Facebook pages or websites to your post to give you more exposure.
Shelton recommends blogging at least three times a week and writing 500 to 750 words per post. You don’t have to interview influencers in each post. Write about current events through the lens of your business expertise. You might even attract journalists looking for a credible expert to comment on a news story.
“Last year, a neurologist client wrote a blog post about the Gabby Giffords tragedy,” says Shelton. “He got a call from 20/20 to comment. It was tremendous publicity for him.”
You can also write up case studies. If you see someone in your industry doing something interesting, call and ask for an interview. Chances are they’ll be thrilled to get the publicity and the two of you can cross-promote—a win-win.
Incorporate video
Adding video to a website has never been easier. Just take a smartphone or Flip video camera (available for about $70) and start recording. Begin with a welcome video that explains what your business is about and introduces you as the owner, says Shelton. Put the video on YouTube or Vimeo and upload it to your homepage.
“Having a video on your homepage is a great way to instantly connect with the site visitor,” he says.
Consider posting a video blog every few weeks. Focus on a topic area you're passionate about or ask a client to give an on-camera testimonial. Interview industry thought leaders and record how-to videos.
“Plumbers can do a video on how to unclog a drain or how to deal with a flood,” Shelton says. “Think about real issues people are facing and provide valuable information that will help them. It will build good will among potential customers and they'll share it with others.”
Offer free resources in exchange for e-mails
Post valuable information and you may snag a client for life. Shelton suggests that you create a box on your homepage called "Free Resources." Write a list of useful information and save it in PDF format.
For example, if you are a home designer, make a checklist for people to run through before choosing a color palette. If you’re an accountant, create a checklist of documents needed to prepare taxes accurately.
Post the downloadable PDF in your Free Resources box, and allow downloads only if viewers subscribe to your e-mail newsletter.
“The exchange is important; it allows a business owner to build a direct line to potential customers,” notes Shelton. “Just make sure to change out resources often. You don’t want your website to look like a brochure where there is no reason to go back.”
Register with business-listing sites
Discoverability is vital to the success of a small-business website. Entrepreneurs should register business sites on Yelp and Yahoo Local. Try Bing Local and Google Places. Peter T. Boyd, founder of PaperStreet Web Design says doing this will not only help your search engine optimization (SEO), it will also validate your existence to customers searching for your services.
Add social media-sharing tools
Have you noticed how every article on The New York Times website gives you the option to Tweet it and share it on your Facebook page? This helps to spread the word about articles and brands.
Small-business owners should offer social media-sharing tools on their sites.
“Search is shifting to social,” says Alicia Marie Phillips, a digital-marketing consultant. Every time you type a search term into Google, the first few links that appear are related items shared by people in your network. Adding sharing tools on your site broadens your reach to potential customers.
“If you don’t have a way to tap into Facebook, Twitter and Google+ on your site, you are missing out,” Phillips says. “People really pay attention to what their friends share.”
If you're not sure how to add social media tools to your site (YouTube tutorial).
Offer daily or weekly deals
As a consumer, nothing catches my eye more than a great deal. Try offering a daily or weekly deal that is exclusive for your online customers and publicize it on your homepage. Talk to your customers in person about these deals, too, recommends Ben Nesvig, social media manager at Snap Social Media.
“Do what you can to blur your offline and online business worlds,” Nesvig suggests. “Consider doing merchandising that promotes your website, along with an incentive to go there.”
Pay attention to keywords
The better your search-engine ranking, the better your potential to capture more page views and, ultimately, more customers. How do you cement yourself on Google’s first page?
“Pay attention to the Google Keywords Tool,” recommends Phillips. “Run a few searches for words that describe your business. The tool will tell you what keywords perform well in search and the ones that don’t. Incorporate popular words into your site to increase your ranking.”
Watch your analytics
Check out the backend workings of your website and you might be surprised by what you find. Register for Google Analytics and you'll be able to see which blog posts are doing best on your site, what keywords are bringing up your homepage and which pages are getting the most clicks.
“Pay attention to these analytics," says Jann Mirchadani, owner of Marketing Café, a digital marketing firm. "They will help guide you in creating more content that is meaningful to your audience."
What website improvement ideas can you share with small-business owners?