Groupon will replace 1 in 10 sales staff to ensure growth
Repeat customers... Who needs 'em?
Groupon CEO Andrew Mason has told potential IPO investors that the company will be replacing 10 per cent of its sales staff in a push to get better deals from merchants and continue to grow.
Mason, who was talking to investors in Boston as part of the initial public offering roadshow for the daily deals site, said the company wanted to improve the quality of the deals it was offering, according to a Reuters report.
The coupon site chief exec also said that deals from new merchants make a better customer experience and there was some bias towards signing up new guys instead of hanging onto the old.
A Groupon spokesperson declined to comment.
Merchants haven't always been too complimentary about working with Groupon, with many saying they don't make any money from the advertising as it relies on them cutting their prices. And the news that existing merchant clients aren't the top priority for the site is unlikely to endear it to those customers.
But Mason is not exactly famed for keeping controversial opinions to himself, as an emailed rant about critics of the company is widely thought to be partially responsible for the postponement of the IPO.
Groupon looks like it might have a problem with repeat users, according to its latest filings to the US Securities and Exchange Commission (SEC) for the IPO.
The firm says it had around 143 million subscribers as of the end of September this year, but only 30 million of them bought coupons in the nine months to September, and only 16 million were repeat customers.
The daily deals site has already given itself a hefty discount, with its IPO currently seeking a valuation of $11.4bn compared to the $25bn it was hoping for in June, and a lack of repeat customers could affect its ability to capitalise on subscribers and make money – thereby further damaging its value.
According to the online version of its roadshow (an oddity in itself as these things are not normally conducted on the net), Groupon shares are scheduled to price around 3 November. ®
Please may I have some more sir?
From the Economist on the Groupon IPO :
"Groupon will lose $280m on revenues of $1.69 billion in 2011"
"Its business model is unpatentable and simple to replicate, so there are already more than 20 copycats."
"Its marketing costs are expected to be a painful $958m this year."
958 MILLION dollars on marketing in order to lose 280 million dollars.
This all smacks too much of the late 90s. Remember boo.com, a company which "spent $135 million of venture capital in just 18 months, and it was placed into receivership on 18 May 2000 and liquidated" (wikipedia)? But boy did they have some fun.
All aboard the Failbus
What wrong with cheap teeth whitening while you're sprayed with fake tan and your feet are nibbled by fish.
Topped off by a night in a hotel that refuses your booking as they're already full-up with freeloaders.
Like so many others, I signed up for a week, then turned it off. Suggest potential investors do the same, but they won't.