Groupon says "No thanks" to $5-$6 BILLION Offer

I've been talking to their president Rob Solomon regarding some issues my business had when we used Groupon at the beginning of January. Nice guy, but doesn't seem to have the gravitas for the top job. Neither frankly does their SVP of sales. They have some real sales and operational challenges ahead of them, adding Google to the mix won't help. You almost get the sense they are ploughing ahead as fast possible to get to the eventual IPO, with nobody looking or caring what happens after that. I told him that yesterday.

 

What did he say in response?

What did he say in response?

 

There is a bit more to it, I used to restructure companies for a living. I did 4 in 10 years. So when I deal with a business, it's always running thru my mind, how's this place organized, quality of the systems, the training and people, how functional/sustainable/scalable is the business model etc.

 

He agreed, he said Groupon does a lot of things well, but they do a lot of things poorly - his words.

 

With their growth they have not been able to develop systems robust enough to keep up. A system that works for a 1,000 customers cannot scale for 100,000. It has to be rebuilt from the ground up. I think that's where they are right now, trying to bodge by with an outmoded sales and operational model.

 

They don't even have 24/7 customer service, they close at 5pm CST on Fridays......a lot of stuff they do is amateur hour. I had a major problem and I eventually got an email from their customer service dept saying they fixed the problem, never called and then referred me back to our sales person. And they had only partially fixed the issue.....

 

Their sales staff are entry level people basically reading off a script. They need a much more consultative sales approach if they are going to develop long relationships with business owners. The service is being commoditized as we speak, there is no magic bullet. Since we did the Groupon promotion, 3 other companies doing exactly the same thing have contacted us and offered lower rates. Their claim that 97% of businesses use them again is complete bs.

Just because Google is Google doesn't mean they will be able to annihilate Groupon. Time will tell. Their effort might be just as futile as Microsoft trying to take on Google.

Almost everything Google does turns to Gold, I'm sure this will too.

I wonder how these guys are feeling now after turning down that massive offer earlier this year.

 

groupons-net-loss-rises-to-over-$100-million