Groupon: Does it really help small businesses?

I love a great deal as much as the next person, and in this economy, we are always looking for ways to save the next dollar which is why Groupon has become such a big hit amongst consumers and small businesses who are trying to grow their business. The way Groupon works is that they offer deals in local markets for a certain timeframe (for anything from food to classes to shopping) but the deal only becomes effective after a certain number of people purchase the Groupon. In order to get the required number of subscribers, they use the power of social media to spread the word and get as many people to buy in. Groupon claims that they can increase business and offer great deals for customers, also known as "collective buying power". In the end, the Groupon subscriber will always win out as they are the ones that are getting the daily deals, but how effective is this for the small businesses they turn to Groupon for help with their business?

THE PRO'S AND CON'S FOR SMALL BUSINESSES

With the success of the site, it's no surprise that small businesses would jump at the opportunity to grow their customer base and Groupon offered that opportunity for them but they have to understand how to manage the deals as it could do more harm then good for the business.

PROS

1. Increase your customer base: by offering deals in the market, businesses will attract more customers who are looking to try something new without having to spend tons of money

2. Increase exposure: if customers didn't know you existed, they will now. Small businesses can use Groupon as part of their marketing without having to spend all the money that comes with it (not that I am saying to only use Groupon as their marketing strategy).

3. Increase sales: this goes hand in hand with increase their customer base. Customers that buy into your deal may keep coming back for more which translates into higher sales.

4. Social Media is on your side: Groupon uses social media sites in order to spread the word about local deals (this is how they get the required number of people to activate the deal)which is very good exposure for the business, especially on sites such as Facebook and Twitter.

5. Redeeming Groupons: whether the customer redeems their Groupon or not, the business still profits so there is no loss.

CONS

1. Cutting into profits: some businesses have claimed to have lost money due to Groupon preferring to offering discounts of 50% or more.

2. Handling the influx of business: although more business is good, small businesses need to be prepared for the sudden increase in activity. Some businesses claim that lines get out of control and they have lost customers becuase of the long wait times.

3. Tracking Groupon redemptions: in order to determine whether Groupon is working for the business, it is important that they track the Groupons that are redeemed. This is something that small businesses are having trouble with as they may not have a system in place and something that Groupon does not have streamlined for smaller businesses.

4. Deals not so great for businnes: businesses really need to consider their profit margins before launching a deal with the website. Some deals are meant to promote further purchasing (for example, $10 for $25 worth of food at a local restaurant), if your average meal costs $18 chances are that customers will not spend any more than the $25 and then their isn't much being gained financially.

Esentially, Groupon can do wonders for a small business but fully understanding how the deals work is essential. There is plenty of room for growth and everyone gets a piece of the pie. So next time you get your daily Groupon email give that local restaurant a chance and check them out, it's a win-win situation for both you guys.

Facial Recognition: No one is safe...not even from Google

In a world were privacy has virtually become non-existant and no one can be trusted, Google has just further blurred the lines by adding "Facial Recognition Technology" to the mix. The way it works is that someone can take a picture of you with your mobile phone and the technology will run the photo through a database(including social media and data sites) and will send that PRIVATE information back to the person who ran the query. Scary isn't it? This type of technology has already been integrated into sites such as Flickr and Picasa where you are able to tag someone and then the site uses facial recognition to suggest other photos to tag your friends in. Now it may seem like a convenience to tag your friends with one click but you may want to think twice next time.

Of course, with breakthrough technology comes concerns of privacy and how it will be affected and with Google's Facial Recognition it has become a huge concern. The main one being that a complete stranger can track you just by a random photo taken of you another one being, who is this information being shared with? If it is so easy to pull up your information through a cell phone picture, then who knows who else has access to your private information and whereabouts. Such concerns have pushed back the release of the new technology and Google has tried to quell concerns by offering some ways to ensure security (but nothing is ever really safe):

1. To send only one of the "identifiers" to the person searching.
2. To possibly allow only the person identified to make the photo public. 3. To send a request after a person is positively identified, asking if the image can be a face search result for other people's visual queries from within their social network.

We have the right to be concerned, most of our lives are posted online for everyone to see and although we should know that is a risk we are taking when posting pictures and information we should also have some sense of privacy and know that others will not be using our privacy to their advantage. So next time you're out in public, be careful what you do and where you step, you might just upset someone and all it takes is s simple picture from a cell phone and all your information and whereabouts is in their hands.

Reviving MySpace...Is it really worth it???

Let's all face it...most of us can't get through a day without some sort of social media interaction. Whether it be through Facebook, Twitter and oh yea, MySpace. Some of you might be asking yourselves "Is that still around??" Yes, MySpace is still alive a breathing but just barely. Recently in the news, there have been talks about MySpace being sold but is that really going to revive the site? Several years back, 2006 B.F. (Before Facebook) Myspace was huge, it was the leading social networking site. But society as a whole is always moving forward and looking for the next bigger and better thing to come along and that's when the Facebook phenomenon ocurred. This left MySpace in the dust with barely a leg to stand on when it's users transferred over.

REVIVING MYSPACE

The sale of MySpace can be seen as an opportunity for the site to regain some ground in the social media market but with the Facbeook giant still in the game how much can MySpace really come back? One option could be to COMPLETELY REVAMP the site, new logo, new image, new site. Something completely void of what it once was. That way, users don't assimilate the two and remove the negativity that surrounds MySpace and how it has been left behind. In other words, make users feel like they are on a brand new site.

Another strategy could be to gear itself towards musicians. After all MySpace music is something that Facebook hasn't quite duplicated and MySpace helped launch the careers musicians and artists. Myspace allowed for musicians to post their music, show dates etc, giving fans easy access to their favorite musicians. In this case, look at local miami band, Nobody's Hero. Here you can see what they are up to. MySpace could enahnce the features of their site to facilitate more interaction between fans and artists. In reality, the only way for MySpace to have somewhat of a comeback would be to change itself completely but let's be honest how much good can that do? With over 500 million active users currently on Facebook and eusers filling up their profiles with their entire lives (pictures, thoughts, friends, videos etc) but will we be willing to go back? The drastic attempts to revive MySpace may not be worth and it just may be time to move on...most of us already have.

Facebok Pages: Branding and the Buying Decision Process

Up until now, companies would market to consumers through commercials, magazine ads, newspapers etc in the hopes of standing out amongst the sea of competitors in the hopes that their prpoduct would be the one you would end up purchasing. With social media, that has all changed. It seems that companies are using sites like Facebook to create more of a community or culture surrounding their products. The approach companies with major brands such as Tide, Victoria Secret, Coca Cola and Starbucks are taking is by creating pages for their product on Facebook where users can go in and "Like" the page. In terms of the consumer and buying decision process, this can be beneficial in two ways:

1. Companies are building brand loyalty as consumers may feel that they have a more personal connection with their brand by "liking" them on Facebook. Most users have their entire lives in Facebook and adding their favorite products or brands is just an extension of that.

2. There is some impact that is made on the consumer's buying decision process. Although most people don't shop around on Facebook for new furniture or that weekend's outfit, a brand's "Fan Page" popularity may somewhat have an effect on the brand that is chosen.

Companies are also integrating added benefits such as coupons (especially for new product launches) on their pages. For example, when Starbucks came out with their ice cream, fans were able to send a pint to themselves or download a coupon. This was a great way for Starbucks to get the word out to their consumers and many of them probably decided to purchase the ice cream for that week.

When a consumer is going through the motions of making a purchase decision, it would seem that thr Facebook page would have an impact on the following steps (let's use the Starbucks Fan Page as en example):

1. Problem Recognition: consumer is thinking that they would like to try out a new ice cream when they go to the supermarket that week. In the meantime they come across the Starbucks Fanpage on Facebook and see that they are coming out with an icecream.
2. Purchase Decision: while on the page, they notice that they are able to download a coupon and then decide that they would try out the new product.
3. Post-Purchase Behavior: depending on whether they liked the product or not or if it met their expectations, they would either purchase the product again or not. With the Facebook Fanpage, they are able to go on and post about the product (good or bad). Then word of mouth begins.

Overall, Facebook has become another marketing avenue that companies can use in order to strenghten their brand in the market. So go ahead and "Like" your favorite brands, their may be some added benefits for the both of you down the line.

Starbucks Mobile Card App Major Flaw

Starbucks has taken another step further into the smartphone technology universe by creating a new app that allows users to pay for their coffee with their smartphone device. For iPhone users like myself, my life is in my phone from email to photos to music and apps that make my life easier. Why not throw my wallet in there too? According to the coffee-giant, users can download an app that works similarly to the Starbucks Card. The app can be loaded with funds that are linked to an account (i.e. debit card) and when it comes time it pay, they just pull up a barcode image on their phone and scan it. TRANSACTION COMPLETE!

At first thought, this idea seems pretty impressive. No need to fumble through my HUGE purse looking for my wallet to pay for my morning coffee. Convenient right? But after looking further into this new app it has become very clear that this new technology has a major design flaw. In the time it takes for you to come back from the bathroom, a hacker can compromise your Starbucks. This can be done due to the fact that your Starbucks account is not password protected and there is no identity verification at the time of purchase. Within minutes your account is depleted with something as simple as a screen shot of your barcode.

CONVENIENCE VS. SAEFTY

This brings about another concern. If it is so easy to gain access to deplete my funds, how easy will it be for hackers to compromise the account that is linked to the Starbucks account. Although you can link your Starbucks account with PayPal, many users will most likely opt to use their debit and credit cards which can make hem sitting ducks for hackers that prey on that type of information.

So question is: Are you willing to compromise your finanicial safety in order to get out of Starbucks a bit quicker or carry around less?

Sources:
http://www.mobilecommercedaily.com/2011/02/09/how-to-compromise-the-starbucks-rewards-card-app-in-90-seconds
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/05/investopedia49861.DTL

http://www.wired.com/epicenter/2011/01/stabucks-mobile-app-goes-national-digital-wallet-advances/#