4 lessons on how Groupon got engagement and built a $6bn business (and used WordPress to do it!)

So it looks like Google will buy Groupon for approx $6 billion. Groupon is a really clever business and I’ve pulled out 4 things they did well that can be applied to communication and engagement projects.

As ever feedback, questions, debate and disagreement most welcome.


Update 05/12/2010 : Since writing this post Groupon have rejected Google’s offer.

1) Test the core aspect of your idea (quickly and cheaply)

Did you know that Groupon started as a simple WordPress blog? Groupon used WordPress because they wanted to test the key aspect of their business. They understood that if the core idea didn’t work then there was no point in adding extra features.  My advice is to start projects with the minimum required functionality and test whether your core idea works.

2) What are your users incentives to engage with you?

Groupon user incentives are very clear.

Groupon members: They get services at a heavy discount. They save money.
Groupon businesses: They get more customers at NO risk

My advice is to make sure you define the incentives for your intended audience. Be really honest at this stage. Don’t skip this. Avoid fluffy definitions. If the incentives aren’t strong then be realistic about your project’s chance of success.

3) Make sure you build your communications plan for your target audience

Groupon works because it relies on young(ish) tech savvy, connected members to spread their deals via social networks and email. The founders of Groupon built their project in the knowledge that their target audience had the tools and knowledge to make the business fly.

4) Solve a problem in a new and better way

Groupon were clear about the problem they were solving.

Problem:  How do businesses engage with customers online?

Traditionally businesses pay publishers to advertise their services. Businesses might get a return or they might not.  This is good for publishers but not so great for businesses. Groupon took an existing ‘way of doing things’ and re-invented how businesses could engage with customers. And it was cheaper and better.

Do you know any public or private sector or projects that are re-inventing or disrupting the existing ‘way of doing things’. If so then please share them below.

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