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Why I don’t like Groupon as a company

April 10th, 2012 · No Comments

It was widely reported that Groupon blows it again, restates earnings as customers demand refunds.

This didn’t surprise me at all. I have nothing against Groupon. In fact I’m a happy customer who had bought a few Groupon deals in the past.

However, I also had the unfortunate experience of negotiating with a Groupon salesperson. Here is what I learned.

  • The Groupon salesperson never gave us his phone number. Every interaction was via email. We emailed him, and he would call us back.
  • He was super aggressive, and said during our first call “let’s meet at 2PM in two days, and I’ll have our CEO and VP joins us for the call.” I doubted his CEO and VP would join our next call, but he was speaking with certainty.
  • He pitched us against our competitors. He vastly exaggerated about the potential size of the deal. The problem was that he knew so little about our industry, he was talking like a fool. We could easily structure a deal to mislead him and he would have no idea until the deal started selling.
  • There was no consistency in whatever he said. Talking to a Groupon salesperson is like talking to a car salesman.

As we all know, Groupon’s business model is built on sales. It didn’t have much competitive differentiation in term of technology and intellectual properties. The way their sales people work, I have serious doubt about the long-term viability and sustainability of their business model.

The way their salesperson carry themselves and interface with external parties is a reflection of the company culture and leadership. Based what I have experienced, I am not a fan of the way Groupon does their business.

One thing for sure, I will not be buying Groupon stock. 🙂

Tags: Company Analysis

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