The real deal with Groupon

What these human beings, the salespeople, do is think up deal ideas - then convince local merchants to offer them at half price.

[Salesperson: So what we're going to do is actually customize a deal specifically to you.]

Groupon has found out by trial and error how to present its deals. Used to be male and female subscribers got the same emails every day. Now Groupon is tailoring its offers by age and gender.

Mason: Yeah, it turns out that guys don't like deals on laser hair removal or pole dancing lessons.

Stahl: Or Brazilian bikini waxes?

Mason: Yeah.

The merchants don't necessarily make money; the offers are half-priced to begin with and Groupon takes nearly 50 percent of that. But it's a marketing tool that gets lots of people in the door. When the Shedd Aquarium in Chicago ran a Groupon, 14,000 people showed up. It's a group coupon. A Groupon!

Stahl: What you did was you took a spam business, a junk mail business, and somehow made it entertaining and cool.

Mason: We do realize that we're sending people an email every single day, and that could get annoying. So there's gotta be something else there that keeps you engaged and keeps you from un-subscribing.

That something is the absurdist humor in the daily deal write-ups. Four hundred writers and editors - more than most newsrooms - come up with hundreds of these pitches a day, with twists of phrases and logic. Here's one for a dentist: "Humans developed smiles as a way to deflect predators in the wild and former bosses in the grocery store."

The loopy write-ups give Groupon its personality, which seems to seep down from the very top. Andrew Mason is known as a little whacky himself. As a gag, his executive washroom is a port-o-potty. And look at this:

[YouTube yoga video: Exhale... step back in...]

Stahl: Can you name another CEO with a demo on YouTube in which you're sitting around in front of a Christmas tree in your skivvies doing yoga?

Mason: Umm... No. That's a huge problem.

The problem is that he now runs a huge company. And his urge to be goofy makes him one of the most unlikely corporate CEOs you'll ever meet.

Mason: I think if there's any difference between me and a traditional CEO, it's that I've been unwilling to change myself or shape my personality around what's expected.

Stahl: So here's a question that you hear a lot: "Is Andrew Mason ready to be a CEO?"

Mason: Am I as experienced or mature or smart as other CEOs?

Stahl: -- of big companies worth as much as yours.

Mason: Yeah. No, probably not. But there's something, I think, very useful about having a founder as the CEO.

According to Forbes Magazine, it's so useful Groupon is the fastest growing company ever. Enter their offices and there's the Forbes cover. But it's surrounded by other covers of hi-tech has-beens, as if they're asking themselves: "Could we be the next to fall by the wayside?" It's a good question.

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[Greenscious]

I can't stand companies that take money away from local businesses. The only way companies like this will survive is if they explain to people how shopping local benefits their community. Better still, they should explain how shopping at Big Box Stores and National chains takes their shopping dollars out of their communities - which stops their shopping dollars from circulating within all their other local businesses... But of course they won't do that because they suck the money right out of local businesses too!

[geldner]

So 8 months later, Groupon has now resorted to SPAM. They won't honor opt-out requests and continue to send "offers". I noticed that SpamCop is dumping spam reports on Groupon emails into devnull because, obviously, Groupon's email admins are ignoring them. A good way for this crashing company to end up on some RBLs.

[wildinaustin]

Groupon is a scheme. They are the messenger only, guaranteeing nothing, not even vetting the folks they push coupons for. And be sure to NOT call them if there are any problems. I bought a groupon and it took me two months to get my money back because the "company" I had bought the coupon for was actually just one irresponsible guy who never returned calls, never showed up for appts and was generally a flake. I blocked their emails. That's all you have to do to get rid of them:)

[LizWillard]

As a 58 year old woman who has been out of work for a year I was dismayed that Andrew Mason's call center didn't show a face over about 35. One would think or hope that a company hiring 150 employees a week could add a few people over 40. I'm sure they don't mind people my age buying their groupons...they just don't want them in their work place. Isn't that discrimination???

[askagain]

Some of the hostility toward Groupon is over the top. 1)Merchants don't have to offer deals through Groupon if they choose not to. 2)Consumers have the option of using or not using Groupon offers. 3) There is no reliable way of predicting whether Groupon will last or is a passing phase. 4)Those who don't want "spam" from Groupon can opt out at any time.

[sallychicago]

Reedmartin: I believe 60 Minutes does a webcast called "after the show" or something like that. Look for it.

[catsmilee]

I don't really get what they offer. I signed up - never could find any value though. Just give me regular coupons that are easy to print.

[sallychicago]

My thesis paper was on Groupon and like companies. There are too many of them chasing the same vendors. Somebody has to drop out. Even Goog has an "groupon" department.

[involved_indi]

they won't last. they're essentially providing nothing special.

[Samlv]

It is a deception, and the model doesn't work.

But, everyone involved made a pile of cash. That is the definition of start-up success.

[Jaylah54]

Yeah, I don't get enough spam already.