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Groupon Incentive Media Living Social

Poor customer service reputation and mistrust to blame for Groupon's ailments says incentive expert


By The Drum Team | Editorial

September 1, 2011 | 2 min read

The fall of traffic to daily deal website Groupon’s website shows that consumers are beginning to mistrust the company, says one promotions expert.

Susie Fraser, managing director of Incentive Media, said that there was ‘a definite trend’ of people beginning to ‘mistrust’ daily deal websites, having either experienced or heard about poor customer service.

“A whole host of these websites have made a lot of money very quickly,” said Fraser. “What they’ve done very poorly in my opinion is to manage the customer experience and dealing with complaints efficiently. They’ve gone for the quick, one-off purchase. If it had been managed better and the customer experience been better, they probably wouldn’t be in this position.”

In terms of Groupon itself, Fraser relayed her own personal experience of dealing with the site; “Many people will not use them again because of their poor experiences and that will close many down. I bought something through Groupon, but never received an email to let me know I had purchased it until I saw it come off my credit card. I tried to call them to see what I had to do next, but nothing ever happened. It’s a combination of the aggressive sales structure, which has crippled a lot of businesses and also the customer experience, which is a real shame as it has potential for long-term growth but that isn’t going to happen now.”

Fraser did say, however, that there were some daily deal websites that she had found to offer a positive experience, highlighting as one such company and added that while brands on the whole had been largely unaffected by problems encountered by some daily deal websites, small companies were being severed affected.

“It has been a real shame for the ones who have used the Groupon tool to market their brand. They’ve maybe not had the money to run a marketing campaign, so they’ve relied on these promotional avenues to raise their profile,” commented Fraser.

While Groupon’s traffic dipped over the summer months, rival deal site Living Social grew by 27%.

Groupon Incentive Media Living Social

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