Guest post by Andrea Fabbri
Every good story has a hero and a villain. These days my villain is actually two companies: Groupon and Living Social.
Social buying platforms have become part of our daily lives. They use scarcity-based tactics to generate demand for coupons and drive short-term sales.
So, you might ask, what is the reason for my disdain? These platforms are, in essence, building a customer base of deal seekers rather than brand buyers—people that frantically swarm stores like locusts searching for cheap items. More often than not, these sites fail to attract the infinitely more desirable, informed customer that selects brands based on value and wants to establish a relationship (an experience) with the businesses they shop from.
While the short-term results may be an increase of sales, the inevitable long-term impact of these social media buying platforms is quite negative. In my opinion they amount to diminished loyalty, commoditization and brand value erosion. Brands get trivialized, they become just a cheap and disposable mean to fulfill a need rather than a valuable asset to deliver an experience, build emotional capital and retain long-lasting meaning.
How many manicure and pedicure daily deals can I take advantage of? Last I checked, I have only two hands and two feet. Moreover, do we need to reinforce what is an already pervasive trait of our consumer society? Really?
Or, could we leverage promotions and discounts to support good?
Empowering Consumers to Do Good Via Commerce, Philanthropy, and Tax Deductions
Here is my hero: Recoup.com, the first cause shopping channel that blends commerce and philanthropy through an innovative business model that benefits businesses, nonprofits and people.
Through Recoup, businesses can empower their customers to purchase a promotion on a brand, repurpose part (or all!) of the promotion to a charity of the consumer’s choice, and receive a tax deduction (the consumer’s deduction, not the company’s) all in a single transaction.
For full disclosure, I am with Recoup. Like most people reading this blog, I have done cause marketing.
Indeed, businesses of all sizes today offer consumers the opportunity of making purchases that support good causes. That’s good and honorable. But what if the causes selected are not personally relevant to consumers? Would I be more willing to buy, for example, a well-designed bottle at Whole Foods if I could donate the assigned promotional value to a cause or an institution that I choose to support because it matters to me, such as the school that my kids attend? We think so.
And indeed, consumers today can buy products that support causes, which are typically selected by businesses. Causes selected are always (by necessity) broadly appealing to a large spectrum of customer segments and the selection process as well as the management of nonprofits can be cumbersome and costly to businesses.
The result is that many good nonprofits are left out and people support causes that may not be personally relevant to them.
With Recoup, businesses save administrative headaches and can support all the causes their customers value. At the same time, customers are empowered to purchase and support the causes they like in one transaction (which also benefits them through a tax deduction) and nonprofits can expand their pool of fundraising and local visibility. It’s a win-win-win for all.
The villain: Groupon and Living Social
The Hero: Recoup.com
What side are you on? I would love to hear about it.