Alternative Revenue Focus | Monday, February 28, 2011
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Learn from Groupon and Pepsi's Mistakes

When you build a business from zero to several billion dollars in sales in a couple of years, quality control is bound to suffer somewhere.

For Groupon, that weak link proved to be Super Bowl advertising development. (I assume you've all seen the ill-conceived ads. Groupon yanked them after a public outcry, but as of Sunday you could see the Tibet creative on this TV station website .)

Instead of adding another critique of the flawed campaign to the chorus, I have some advice for Groupon and anyone else creating cause-related programs:

Build a feedback loop into your work.

It's depressing how rarely solid market research analysis is conducted on cause-related campaigns. Investing in understanding how your campaign will be perceived and later determining what went right and what went wrong can pay huge dividends.

Serious research (described in this MediaPost article) has helped Pepsi make some very smart alterations to this year's version of its crowdsourced Refresh campaign. For example, it's creating more opportunities for smaller groups and cutting down on abuse by substituting a lottery for its first-come, first-served entry system and eliminating $250,000 awards to fund a greater number of smaller awards.

Internal Pepsi research revealed that bottlers and other stakeholders didn't feel the program supported sales. In 2011, cans and bottles will carry promotional messaging and offers such as bottle cap offers for extra votes.

Another example: Since eBay Giving Works launched in 2003, ongoing analysis has transformed it from a nice program to a serious business-building enterprise that keeps growing in terms of sales impact and charitable contributions.

Improvements such as making it easier for consumers to donate to their favorite nonprofits pushed donations from eBay sellers and buyers to a record $54.8-million in 2010, a 7-percent bump.

Lets hope that armed with solid research and planning, Groupon will use its marketing muscle to create future cause campaigns that generate as many accolades as this year's effort yielded brickbats.

(Source: David Hessekial, Cause Marketing Today, 02/22/11)



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