It’s always like an “OMG I didn’t quite see it that way” moment, when we begin to discover what some business models actually are. For eg, a number of years ago I remember the first time when someone told me that McDonald’s is actually NOT in Burgers business but in real estate business. (There is actually a How Stuff Works page that explains how the back bone of its business model is real estate!). I felt awed at the parallel and suddenly became aware of all those unseen opportunities that become the back bone of business models themselves.
Similarly, last year, it dawned upon me (again from an insightful article) that twitter is actually in water cooler business! Hang on , not in the literal sense of the word, but yes in the metaphorical sense. Water cooler is a place where people bump into each other and exchange ‘Hi’s, ‘Hello’s, How do you do’s and occasionally exchange tidbits and updates. If I come to think about it, isn’t that what Twitter is doing?
Anyway, the point is, that I have read this blog by Joshua Gans and he makes a case that GroupOn is actually in Memory business. Hmm„ may be you could argue, may be not. But what stuck me as insightful was the fact that GroupOn seems to be missing some obvious opportunities at hand. For eg: If I were to buy a coupon as a gift to my near and dear, can’t GroupOn capture that and leverage it as a potential opportunity to sell more similar coupons to me in the future? By tracking user specific purchase trends, can’t it bargain for more relevant discount coupons and do a gmail-like user interest based coupon delivery system? Groupon already has the database of every single user and can easily track the trends of the individual subscribers (atleast in a significant number of cases where the usage and buy in rate is higher than average).
That way, I don’t receive a coupons that are completely irrelevant to me. That way I am willing to sit up and take notice. That way I am eager to act, as the offer in question pertains to my interest.
Speaking of which, I am reminded of this great book store that has a presence in Singapore, Hong Kong, Thailand, China and Taiwan (phew! last time I knew they had presence only in Singapore, Hong Kong and Taiwan). I somehow I so loved their interior, decor, ambience and over all feel (and better still has a store near to where I live) – that I ended up taking their My One Card (a loyalty card that rewards me with 5-10% discount on each book that you buy).
Each time I buy a book, they just need to be shown the card and you get a discount. Now that’s bad. Why?
- The card effectively is transferable, meaning my friends can just borrow the card and leverage the discount.
- They don’t do any entry of what book was bought against which card. Had they done that they would have an invaluable database of who has bought what books and at what times
I actually needed to buy the card as it is not free and had to fill in all my details to get the card. Hence the very fact that a customer holds a card means that he/she is willing to be loyal to the store and has shared very valuable info about themselves. And most importantly each time they make a purchase they show to PageOne cashier what their interests are (after all your book needs to be scanned to charge you.. right?).
Pity that PageOne doesn’t even capture that in their database. A lost opportunity – of not being able to sell what is more relevant to me, of not being able to keep me hooked to the store, of not trying to cross sell me titles that fall under my area of interest.. all despite the fact that it has all the means to collect all the required info about me.
Do you see any such lost opportunities around?