Living Social raised $175 million from Amazon at the tail-end of 2010 and we saw thist week the benefit that could reap: A 50% off Amazon gift card offer sold more than 1.3 million copies, netting hundreds of thousands of new customers to Living Social and raising the profile of this Groupon competitor higher than it has ever been.
If you Groupon, you probably shop Amazon. The conversion rate for this deal must have been sky high. It was tweeted a ton. I saw it all over Facebook. Awesome deal, everyone bought it.
Even I bought it – my first daily deal purchase ever. Now I was on Living Social’s list and the next day I received my next offer: 50% off a pizza somewhere in the Penn Quarter of DC.
FAIL, FAIL, FAIL, FAIL.
You just added hundreds of thousands of new emails to your database and your first communication with them is a weak follow-up offer.
Here were a few of the other offers the day after Amazon:
- 15 weeks of kids dance classes
- Bikram Yoga classes
- A coupon to buy some mussels
They needed a big deal to follow it up. Something mass market that had broad appeal. Instead, probably half the subscribers immediately unsubscribed because this looked like a once in a lifetime deal.
A great deal drives retention, they just lost a lot of the benefit of adding new participants. Why treat this like strictly one-time PR? This could have turned into real long-term customers.
Or maybe those deals sound great to you.