Group buying site Groupon is growing so fast that its “deals of the day” are attracting the attention of big brand names like the Gap. One small business owner believes this growth is making Groupon “greedy,” so much so that it chose not to honor a signed contract because the agreed upon margins were too small. This is his story.
In January, small business owner Gregroy Yonke used Groupon to run a Featured Deal that gave buyers half off his Phoenix, Arizona Entrees to Go guided cooking sessions. Yonke couldn’t have been more pleased with the results — Groupon delivered new customers who became repeat customers, he says.
After taking the summer to explore working with a bevy of new Groupon clones, Yonke got a call from Groupon indicating that the company was interested in having him run another featured deal. And so, Yonke put off his other marketing plans for another go-around with Groupon, because in his mind, “Groupon is bigger than all the others combined.”
Talks progressed and eventually the terms of the new deal were decided. On September 7, Groupon e-mailed Yonke a merchant agreement and asked him to reply to the e-mail with “agree” in the subject line. Yonke did so on September 14, believing this meant there was now a contract in place guaranteeing him another featured deal within four to six weeks time. That time frame had been discussed in the e-mail exchanges, but was not, in fact, included in the agreement.
Then, on October 11, Yonke was notified that his deal had passed through the “vetting” stage, meaning it had been approved for scheduling. Yonke was anxious to view and approve the deal copy, but his Groupon representative wrote to inform him that the deal would be prepared after it had been scheduled.
This is when things started to go awry. On October 19, Yonke e-mailed his rep to once again press to find out the date on which his deal would run. Here’s the response he received, with confidential information redacted:
“After further deliberation, we have decided that we are not going to be moving forward with the rate confirmation for Entrees to Go. After running the numbers, we don’t feel it is the right move for us at this time. I appreciate your interest in running again, and unfortunately, we were not able to make it work on our end for a second feature. I wish you the best moving forward.”
Astonished, Yonke e-mailed back asking, “On what basis are you making this decision?”
Groupon’s response was as follows:
“With the margin in place, we will be at a loss running this feature. It simply is not in the best interest of Groupon to run Entrees to Go at this time. Per the rate confirmation, Section 1.3, ‘Groupon will offer the Vouchers for sale on dates in its discretion.’ We are choosing, with all due respect, not to move forward at this time. I appreciate your patience and apologize that it doesn’t work at this time.”
In a conversation with Mashable, Yonke explained that he was quite taken aback by the response because he believed that there was a legal contract in place guaranteeing him a featured deal for Entrees to Go.
Yonke also shared that at one point Groupon pressured him to “sweeten the deal,” which he agreed to do, but only if Groupon agreed to take the same dollar amount — i.e. not the same percentage of sales — as agreed to in the initial deal. Groupon, however, wanted the same percentage, and that was just something “I couldn’t afford to do … I was already losing money on the other deal,” he said.
Earlier today, Yonke was again contacted by Groupon, but this time offering him a personalized deal, and not a featured deal. Personalized deals are only sent out to select, more targeted, audiences in the Groupon subscriber base, but Yonke was only interested in the featured deal, which would have gone out to all of Phoenix.
For Yonke, this Groupon deal represented the entirety of his marketing strategy, and it was the only way in which he was planning to attract new business at the Entrees to Go store he owns with his wife Dorothy.
Yonke believes he was overlooked because of the small stature of his business. He points to the fact that the featured deal running in Phoenix today is for Coldwater Creek, a national retailer with a much more prominent brand name. He says, “I get it … they can do a featured deal for the Gap and make $11 million in one day.”
The jilted small business owner reached out to Mashable to share his experience primarily because his marketing plans for bringing in end-of-year business have been stymied. He’s currently offering the deal through the FAQ portion of his own website, but admittedly does not have reach to a large audience.
Given Groupon’s immense growth this year, it follows that the startup will have disgruntled customers from time to time — and we’ve seen this before. While Mashable has confirmed the legitimacy of the e-mail communications between Yonke and Groupon, we caution the reader to remember that this is just one small business owner’s story.
Still, we felt this story to be of particular interest because it suggests that Groupon is shifting the focus of the featured deals away from the small business owners they once catered to. The smaller businesses, instead, seem to be destined for relegation to its personalized deals product or the do-it-yourself Groupon Stores.
Prior to publishing, Mashable reached out to Groupon for comment, and we’re told the company is now looking into the matter. We’ll update this post when there’s an official statement from the company.
For more Social Media coverage:
As part of the ongoing Mashable Awards, we’re taking a closer look at each of the nomination categories. This is “Most Influential Social Good Champion” supported by Yahoo!. Be sure to nominate your favorites and join us for the Gala in Las Vegas!
Social Good is a brand new form of online giving that draws both from small non-profits and large brand cause-marketing campaigns. But like any burgeoning movement, social good requires champions to bring it to the public and promote its growth.
While “social good” and “influence” may not have absolutely concrete definitions (is influence based on Twitter followers? Raising the most money?), it is easy to see when an individual has taken on the cause of social good to create some real change.
Even though the exact parameters are a subjective call, we scoured the web for three social good activists who are using their skills to create change. We’ve highlighted three individuals who are utilizing social media and online campaigns to shape the way that we think about activism.
1. The Free Agent
Beth Kanter and Allison Fine defined the concept of the “free agent” this year in their book, The Networked Nonprofit. A “free agent,” as they defined it, is a “person who is passionate about a social cause, but is working outside of a nonprofit organization to organize, mobilize, raise money, and engage with others.” Using social media tools, free agents are able to make an impact that was once only capable within the infrastructure of an organization.
We’ve covered a number of free agents who had influence this year. Individuals like Shawn Ahmed, who posts YouTube
Kanter, a free agent herself, has played an influential role in helping non-profit organizations accept and cooperate with these social media-powered activists. Among her efforts, she facilitated a conversation at the State Department’s Tech@State Civil Society 2.0 event about how non-profits and free agents can work together.
2. Ben Rattray, Founder and CEO of Change.org
There are two hurdles that almost every cause campaign struggles with. The first is making the complexities and realities of its cause understood. The second is mobilizing people effectively. Change.org, which was founded by Ben Rattray in 2006, helps solve both.
The site has more than 100 writers who contribute in-depth reporting on 15 different causes. When people come to the site to read about a cause they’re passionate about, they also have the opportunity to take action toward that cause by signing petitions. While these cumulative actions lack the drama of a protest, mobilizing a large network toward one specific action has proved a lot more effective than a hodgepodge of independent actions.
Change.org has partnered with thousands of non-profits, and together the community has accomplished more than 100 “victories,” in which they’ve changed an unjust practice, law or policy. The organization connects activists with similar passions, and by doing so it gives them power as a cohort that they would never have as individuals.
3. Scott Harrison, Founder of Charity: Water
Charity: water uses 100% of public donations to fund water projects and is transparent about how donations are used. Both of these qualities make it somewhat of an oddball in the non-profit world — which might be exactly what the non-profit world needs.
When people donate money to most organizations, they’re not sure what happens to their donation or how efficiently it was used. When they give to charity: water, they can look up a picture and GPS coordinates of the project they contributed to. Since the organization relies on private donors for the money that makes it run, there’s no doubt about whether your donation ended up paying for somebody’s flight instead of funding a water project. The organization even covers its PayPal fees on donations.
This model of transparency and accountability has created trust and helped raise more than $20 million for 3,196 projects in the past four years. We hope that its success will influence other non-profits to do the same.
What’s Your Pick?
Who were your social good champions this year? Let us know in the comments or nominate them for a Mashable Awards. The Mashable Awards Gala at Cirque du Soleil Zumanity (Vegas)
In partnership with Cirque du Soleil, The Mashable Awards Gala event will bring together the winners and nominees, the
Date: Thursday, January 6th, 2011 (during International CES Convention week)
Mashable Awards Category Sponsor:
Yahoo! is an innovative technology company that operates the largest digital media, content, and communications business in the world. Yahoo! keeps more than half a billion consumers worldwide connected to what matters to them most, and delivers powerful audience solutions to advertisers through its unique combination of Science + Art + Scale. Yahoo! is proud to sponsor this Mashable Award because Yahoo! is focused on connecting individuals to a community of millions so they can change the world together. That’s How Good Grows at Yahoo!. Yahoo! is headquartered in Sunnyvale, California. For more information, visit the company’s blog, Yodel Anecdotal.
Image courtesy of iStockphoto
For more Social Good coverage:
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Group buying site Groupon is growing so fast that its “deals of the day” are attracting the attention of big brand names like the Gap. One small business owner believes this growth is making Groupon “greedy,” so much so that it chose not to honor a signed contract because the agreed upon margins were too small. This is his story.
In January, small business owner Gregroy Yonke used Groupon to run a Featured Deal that gave buyers half off his Phoenix, Arizona Entrees to Go guided cooking sessions. Yonke couldn’t have been more pleased with the results — Groupon delivered new customers who became repeat customers, he says.
After taking the summer to explore working with a bevy of new Groupon clones, Yonke got a call from Groupon indicating that the company was interested in having him run another featured deal. And so, Yonke put off his other marketing plans for another go-around with Groupon, because in his mind, “Groupon is bigger than all the others combined.”
Talks progressed and eventually the terms of the new deal were decided. On September 7, Groupon e-mailed Yonke a merchant agreement and asked him to reply to the e-mail with “agree” in the subject line. Yonke did so on September 14, believing this meant there was now a contract in place guaranteeing him another featured deal within four to six weeks time. That time frame had been discussed in the e-mail exchanges, but was not, in fact, included in the agreement.
Then, on October 11, Yonke was notified that his deal had passed through the “vetting” stage, meaning it had been approved for scheduling. Yonke was anxious to view and approve the deal copy, but his Groupon representative wrote to inform him that the deal would be prepared after it had been scheduled.
This is when things started to go awry. On October 19, Yonke e-mailed his rep to once again press to find out the date on which his deal would run. Here’s the response he received, with confidential information redacted:
“After further deliberation, we have decided that we are not going to be moving forward with the rate confirmation for Entrees to Go. After running the numbers, we don’t feel it is the right move for us at this time. I appreciate your interest in running again, and unfortunately, we were not able to make it work on our end for a second feature. I wish you the best moving forward.”
Astonished, Yonke e-mailed back asking, “On what basis are you making this decision?”
Groupon’s response was as follows:
“With the margin in place, we will be at a loss running this feature. It simply is not in the best interest of Groupon to run Entrees to Go at this time. Per the rate confirmation, Section 1.3, ‘Groupon will offer the Vouchers for sale on dates in its discretion.’ We are choosing, with all due respect, not to move forward at this time. I appreciate your patience and apologize that it doesn’t work at this time.”
In a conversation with Mashable, Yonke explained that he was quite taken aback by the response because he believed that there was a legal contract in place guaranteeing him a featured deal for Entrees to Go.
Yonke also shared that at one point Groupon pressured him to “sweeten the deal,” which he agreed to do, but only if Groupon agreed to take the same dollar amount — i.e. not the same percentage of sales — as agreed to in the initial deal. Groupon, however, wanted the same percentage, and that was just something “I couldn’t afford to do … I was already losing money on the other deal,” he said.
Earlier today, Yonke was again contacted by Groupon, but this time offering him a personalized deal, and not a featured deal. Personalized deals are only sent out to select, more targeted, audiences in the Groupon subscriber base, but Yonke was only interested in the featured deal, which would have gone out to all of Phoenix.
For Yonke, this Groupon deal represented the entirety of his marketing strategy, and it was the only way in which he was planning to attract new business at the Entrees to Go store he owns with his wife Dorothy.
Yonke believes he was overlooked because of the small stature of his business. He points to the fact that the featured deal running in Phoenix today is for Coldwater Creek, a national retailer with a much more prominent brand name. He says, “I get it … they can do a featured deal for the Gap and make $11 million in one day.”
The jilted small business owner reached out to Mashable to share his experience primarily because his marketing plans for bringing in end-of-year business have been stymied. He’s currently offering the deal through the FAQ portion of his own website, but admittedly does not have reach to a large audience.
Given Groupon’s immense growth this year, it follows that the startup will have disgruntled customers from time to time — and we’ve seen this before. While Mashable has confirmed the legitimacy of the e-mail communications between Yonke and Groupon, we caution the reader to remember that this is just one small business owner’s story.
Still, we felt this story to be of particular interest because it suggests that Groupon is shifting the focus of the featured deals away from the small business owners they once catered to. The smaller businesses, instead, seem to be destined for relegation to its personalized deals product or the do-it-yourself Groupon Stores.
Prior to publishing, Mashable reached out to Groupon for comment, and we’re told the company is now looking into the matter. We’ll update this post when there’s an official statement from the company.
For more Social Media coverage:
As part of the ongoing Mashable Awards, we’re taking a closer look at each of the nomination categories. This is “Most Influential Social Good Champion” supported by Yahoo!. Be sure to nominate your favorites and join us for the Gala in Las Vegas!
Social Good is a brand new form of online giving that draws both from small non-profits and large brand cause-marketing campaigns. But like any burgeoning movement, social good requires champions to bring it to the public and promote its growth.
While “social good” and “influence” may not have absolutely concrete definitions (is influence based on Twitter followers? Raising the most money?), it is easy to see when an individual has taken on the cause of social good to create some real change.
Even though the exact parameters are a subjective call, we scoured the web for three social good activists who are using their skills to create change. We’ve highlighted three individuals who are utilizing social media and online campaigns to shape the way that we think about activism.
1. The Free Agent
Beth Kanter and Allison Fine defined the concept of the “free agent” this year in their book, The Networked Nonprofit. A “free agent,” as they defined it, is a “person who is passionate about a social cause, but is working outside of a nonprofit organization to organize, mobilize, raise money, and engage with others.” Using social media tools, free agents are able to make an impact that was once only capable within the infrastructure of an organization.
We’ve covered a number of free agents who had influence this year. Individuals like Shawn Ahmed, who posts YouTube
Kanter, a free agent herself, has played an influential role in helping non-profit organizations accept and cooperate with these social media-powered activists. Among her efforts, she facilitated a conversation at the State Department’s Tech@State Civil Society 2.0 event about how non-profits and free agents can work together.
2. Ben Rattray, Founder and CEO of Change.org
There are two hurdles that almost every cause campaign struggles with. The first is making the complexities and realities of its cause understood. The second is mobilizing people effectively. Change.org, which was founded by Ben Rattray in 2006, helps solve both.
The site has more than 100 writers who contribute in-depth reporting on 15 different causes. When people come to the site to read about a cause they’re passionate about, they also have the opportunity to take action toward that cause by signing petitions. While these cumulative actions lack the drama of a protest, mobilizing a large network toward one specific action has proved a lot more effective than a hodgepodge of independent actions.
Change.org has partnered with thousands of non-profits, and together the community has accomplished more than 100 “victories,” in which they’ve changed an unjust practice, law or policy. The organization connects activists with similar passions, and by doing so it gives them power as a cohort that they would never have as individuals.
3. Scott Harrison, Founder of Charity: Water
Charity: water uses 100% of public donations to fund water projects and is transparent about how donations are used. Both of these qualities make it somewhat of an oddball in the non-profit world — which might be exactly what the non-profit world needs.
When people donate money to most organizations, they’re not sure what happens to their donation or how efficiently it was used. When they give to charity: water, they can look up a picture and GPS coordinates of the project they contributed to. Since the organization relies on private donors for the money that makes it run, there’s no doubt about whether your donation ended up paying for somebody’s flight instead of funding a water project. The organization even covers its PayPal fees on donations.
This model of transparency and accountability has created trust and helped raise more than $20 million for 3,196 projects in the past four years. We hope that its success will influence other non-profits to do the same.
What’s Your Pick?
Who were your social good champions this year? Let us know in the comments or nominate them for a Mashable Awards. The Mashable Awards Gala at Cirque du Soleil Zumanity (Vegas)
In partnership with Cirque du Soleil, The Mashable Awards Gala event will bring together the winners and nominees, the
Date: Thursday, January 6th, 2011 (during International CES Convention week)
Mashable Awards Category Sponsor:
Yahoo! is an innovative technology company that operates the largest digital media, content, and communications business in the world. Yahoo! keeps more than half a billion consumers worldwide connected to what matters to them most, and delivers powerful audience solutions to advertisers through its unique combination of Science + Art + Scale. Yahoo! is proud to sponsor this Mashable Award because Yahoo! is focused on connecting individuals to a community of millions so they can change the world together. That’s How Good Grows at Yahoo!. Yahoo! is headquartered in Sunnyvale, California. For more information, visit the company’s blog, Yodel Anecdotal.
Image courtesy of iStockphoto
For more Social Good coverage:
bench craft company reviews
Portland terrorist bomb plot: <b>News</b>, opinion from The Oregonian and <b>...</b>
Return to OregonLive later today for more from The Oregonian on the terrorist arrest.
Jade Raymond making Splinter Cell 6 <b>News</b> - Page 1 | Eurogamer.net
Read our news of Jade Raymond making Splinter Cell 6.
Small Business <b>News</b>: Small Biz Bonanza
On this day after Thanksgiving, we thought we'd create a feast of small business resources ourselves. Please dig in and enjoy every tasty morsel. This bonanza.
bench craft company reviews
Portland terrorist bomb plot: <b>News</b>, opinion from The Oregonian and <b>...</b>
Return to OregonLive later today for more from The Oregonian on the terrorist arrest.
Jade Raymond making Splinter Cell 6 <b>News</b> - Page 1 | Eurogamer.net
Read our news of Jade Raymond making Splinter Cell 6.
Small Business <b>News</b>: Small Biz Bonanza
On this day after Thanksgiving, we thought we'd create a feast of small business resources ourselves. Please dig in and enjoy every tasty morsel. This bonanza.
bench craft company reviews
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