[
Updated.] Groupon's second-quarter financial report,
released yesterday after markets closed, left investors badly shaken today:
GRPN shares dived 27%, to a new post-IPO closing low of $5.51. The stock debuted in November at $20.]
The report followed news that some GRPN sales staffers are fleeing the company. The chief executive of education-software firm
Top Hat Monocle says that over the past month, his Toronto start-up has received hundreds of résumés from Groupon sales representatives who may want to jump ship, according to
this new Wall Street Journal story.
Groupon is the leader in the online coupon market where Gannett has launched DealChicken. But shares in the Chicago-based site have
plunged 72% since it public in November.
In July, meanwhile, GCI CEO
Gracia Martore told Wall Street analysts that DealChicken's second-quarter revenue had jumped along with its visitor count.
Groupon investors could get some good news today if it manages to report quarterly financial results that are in line with forecasts.
Then it might just have a chance to do something about its stock price.
Jim, your story is misleading. The story is actually about Groupon and not Deal Chicken. The two properties are owned & managed by two completely different companies. What the hell is your point?
ReplyDelete5:35 See first sentence of second paragraph.
ReplyDelete5:35 See first sentence of second paragraph.
ReplyDeleteIf the original and largest online coupon market is tanking, there is NO WAY Deal Chicken is going to be profitable in any meaningful way.
ReplyDeleteAnother Gannett digital idea laying a egg.
it's also old and outdated art work. Lazy
ReplyDeleteMy groupon deal of the day is $29 for a Foot Massage and Ion Detox Soak...who the hell wants that.
ReplyDeleteDoes Deal Chicken even have a sales staff?
ReplyDeleteWe've changed the logo on the chicken already? Doesn't anyone know anything about branding?
ReplyDeleteActually - the problem with GroupOn is it is a concept - not a "thing."
ReplyDeleteThe only thing they have that is proprietary is the name.
Anyone - even Gannett - can copy it and squeeze their way into the market.
Deal Chicken needs to be choked. Ad staffs are being pressured to sell it to customers who have had enough of the deal of the day that doesn"t generate any real money for them.
ReplyDeleteWe are far too late to this game.
GroupOn bloom is off the rose. Same for all copycats, including the dead, oops, I mean deal chicken.
ReplyDeleteWhy Groupon fails, while Gannett's DealChicken property is stable:
ReplyDelete++++++++++++++++++++++++++
Groupon did not have a an existing sales force in established markets.
Gannett had pre-existing sales teams in established markets.
----
Groupon was a startup company, with a singular product.
Gannett is a conglomerate with multiple advertising media outlets, with a diversified array of products.
----
Groupon had to scrample to learn the markets and there relative demographics. During Groupon's struggle to "learn the business," they had expended a great deal of investor-funds.
Gannett had seasoned sales associates that already knew the market and the demographics they have been serving.
----
This is why DealChicken remains steady, while Groupon, a start-up gone public, continues to struggle. Groupon in NOT a story of a general deal-site company. Groupon is a story of a start-up that has gone slightly sour in mouths of it's initial investors.
Regarding the comments about the artwork:
ReplyDeleteThe art work, displayed,is from the test-launch of the deal chicken product.
6:03,
ReplyDeleteThe sales staff is also pressured to sell our print-advertising products. Our sales staff has always been under pressure, since they are the source of revenue. I have been with the company for almost two decades. During my time, I have not seen a sales person ever rest on their laurels. These are our breadwinners, and they are constantly underpressure, when selling any of our products.
11:22 AM,
ReplyDeleteDeal Chicken is profitable for Gannett. And, it has been meaningful for our company, as a vibrant source of revenue.
11:22,
ReplyDeleteDo you remember AOL the original of the internet-giants? There was a time when AOL ruled over the internet. You maybe too young to remember, but AOL was "yesterday's Google".
3:52,
ReplyDeleteEvery company has unique strategies, resources, and management. Deal Chicken gains it's stability from it's original business model and a modest initial investment. It really can not be compared to the success of a start-up company. Start-ups by nature are very risky investments. Start-ups are highly speculative and considered one of the highest risk investments. There are many variables to consider when measuring the rate-of-success with a new company. Price of the product, Quality and Consumer reach, Customer satisfaction, Internal management of allocated funds and investment dollars, etc.
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ReplyDeleteJim,
ReplyDeleteI see that your using an adorable boyhood photo to disarm us. (beautiful photo.)
I am proud of Deal Chicken's success because it was derived in a time of need to generate revenue with existing resources. It has helped many employees keep their jobs. And, it's also responsible for some new hires. It required very little investment because Gannett was already positioned in the local-market spaces, and had advertising sales staffs. A conservative product-development investment, affected the launch time. Even with a suspended launch, Deal Chicken has been extremely successful in the generation of revenue with a modest investment. If the late launch is relative to a modest & conservative investment... Perhaps Gannett's conservative approach may prove to be the best example of slow and steady wins the race, in the wake of Groupon's struggle to recover from it's initial investment. A conservative investment will statistically yield a greater return. I am proud of our employees who poured their hearts and souls into an amazing product. It's was generated from a great business plan, further enhanced by well managed marketing and sales staffs. It's a true success story of individuals working together to build something that yields a return, both financial and spiritual. Because of Deal Chicken some more people are employed, who can pay their mortgages, and place food on the family table. I hope the spirt of Deal Chicken catches on and permeates and modivates Gannett employees. We can work together, inspire and motivate one another to build great products and meet business goals.
ReplyDeleteI love the branding for this product.
ReplyDeleteYou need to go to www.DealChicken.com and check out the incredible branding and design work. It's very eye catching, and well thought out.
Deal Chicken has some amazing deals.
ReplyDeleteLook at this deal that 17,529 people purchased: http://www.dealchicken.com/binghamton-ny/10873?hint=popular
That's awesome! You go chick-a-dee!
I am getting this for my teenage daughter:
ReplyDeletehttp://www.dealchicken.com/wilmington-de
My glass is half full. Deal Chicken is the reason for Groupons's problems. You go Chicken!!!!!
ReplyDeleteFrom the time of conception, the D-C idea & buiness plan was well thought out and contructed. It provided a true blue-print to build from. We were fortunate that a concrete business plan was submitted to DIG. The DIG followed through and initiated a development team and test market. And with the our current sales knowledge, this bird has taken off and soared like no chicken has flown before. I also think Gannett should bring the DIG project back. It's a great way to initiate growth within the company.
ReplyDeleteNot to ruffle any feathers, so to speak, but the dealChicken is a great product. And, the way that Gannett conducts business with the advertiser is phenomenal. It's helped a great deal of merchants take their business to a higher level of sales/profit.
ReplyDeleteThe business plan was NOT a good fit. The concept may have gone gang-busters in Phoenix where it originated but shoving a manager and a salesperson into the few sites it was rolled out to put financial and time pressure that was not justified by results, either immediate or years later.
ReplyDeleteHad it been such a remarkable idea and direction, we would not be scrambling for new eggs to sell it on the now-offered part-time, commission only basis. As it is, the only over-easy turn we've seen is the rotating of those managers and reps into regular sales roles if they were any good, the local radio stations if they weren't.
Anybody who builds their business on discounting their product is advertising that they are overpriced. We shouldn't do it, the carmakers shouldn't, and our customers shouldn't.
There are sure some egg-cited deal chicken fans on here. At our site we have one sales rep still choking the dead chicken. I see 2-3 new deals a week, though, so maybe the ole bird has a little bit of life left. Hope so. Need every penny we can get as print subscribers continue to bail and (former) digital readers scream: "you want me to pay for this shit?"
ReplyDeleteGCI had to do DC, or G would have just rolled them over. Not perfect, but seems to be working. Notice how there are no more stories about "how great" G is?
ReplyDeleteG appears to be in real trouble, IMHO.
My we've got a lot of sudden surprise Dealchicken support. Let's look at a sample of numbers grabbed off the Delachicken website: since Dealchicken displays 8 deals, I counted how many of the deals on 10 random sites were actual local deals, not those junky "discount vacation" national package/scam things - what I saw was:
ReplyDeleteMontgomery 3 local deals
Palm Springs 3
Sacramento 1
Little Rock 1
Louisville 3
Asheville 4
Lansing 1
Cincinnatti 3
Nashville 4
Fort Meyers 4
Yep, it looks like people are just beating down our doors.
I just don't know about the Chicken, I've browsed several markets on the site looking for anything amazing and came away feeling "meh". Wish I were more into foot-rubs.
ReplyDeleteThere are some people really drinking the cool-aid on here about Deal Chicken. If the product was so great, then why is the national average of deals per site only at 5 per pipeline?!
ReplyDeleteYou claim that Gannett is greatly positioned because of the sales staff already in the markets when the local sales teams DO NOT sell any deals. In my site there has never been a local rep to sell a deal since it went live.
You want this fixed? Change the model to not copy Groupon and incentivize your local reps with the relationships to sell it.
A Deal Chicken rep said that they had a sales meeting at corporate where more than half the room were new reps under 6 months. It will be a continued revolving door until things change.
5 Deals per market average?
You have to be joking....
Deal Chicken cluck cluck
ReplyDeleteFor an industry outsider's view:
ReplyDeletehttp://performinsider.com/2012/06/how-dealchicken-com-screwed-up/
Sell this junk to livingsocial already
ReplyDelete9:06,
ReplyDeleteI think the original comment about the initial business plan, was in relation to buiness plans being written for new products. Your complaint is related to the area of "management." Your examples would be relative to stategic planning. Stragic planning refers to the allocation of resources to carry out the initial objectives/goals. The commmision only based sales would be incredibly stressful, especially in this economy, but not unheard of. Management should reconsider this approach, and open up the corporate purse-strings a bit.
The numbers given above a wrong.
ReplyDeleteMontgomery = 8 deals.
Palm Springs = 9 deals
Sacromento = 7 deals
...Yada, Yada, Yada... I am sure your other numbers are wrong. I don't have time to look up everything.
1:28,
ReplyDeleteLOL. Spa related services may not appeal to everyone. Personally I don't want a rub-down, myself. However, there are a lot of other types of deals out there that are appealing. This deal appeals to me: http://www.dealchicken.com/bangor-me
I go for the food related deals
I love that photo. Looks delicious.
This is a yummy deal: http://www.dealchicken.com/northern-virginia-va/16413
ReplyDeleteI am sending it to my peeps in Chevy Chase, MD.
2:43, you are correct. And, there was a deviation from the initial business plan/model. Only part of the original business plan was implemented.
ReplyDelete7:14 numbers are not wrong. Poster said "local" deals. Sure Montgomery has a total of 8 deals, but only three of those are actual local businesses, as the original poster said. The others are all national campaigns for "online jewelry" and other assorted bunk.
ReplyDeleteAnd let's look at those three great local deals - we have a $25 deal, a $12.50 deal, and a $10 deal. Man, we must be rolling in dough with our commission on those! If we take the Groupon 25% gross cut, we're making $12.50, $6.75 and $5 on each of those - woohoo!
Thanks for that link, 5:05. Insightful piece.
ReplyDelete7:37 For better or worse, that always seems to be the case -- deviation from the original business plan/model is the standard Gannett way. However, classic marketing practices note that if you can't be FIRST in a category, then you'd better be BEST (better than the first) if you expect to succeed. Deal Chicken is not better or distinguished from Groupon in any way. Groupon had its heyday and now the category has been diluted by too many copycats and somewhat impacted by a poor economy. I used to purchase Groupon offers several times a month but have reduced that to quarterly at the most due to less enticing offers and watching my budget. Deal Chicken -- never have found an offer that was enticing enough to bother with.
ReplyDeleteMaybe they should revisit the original business plan/model.
ReplyDeleteI like the deal chicken offers, but I am just to strapped (financially) at the moment.
ReplyDeleteIf they would have consulted with writer of the original business plan, there would have been a more substantial impact. Instead they had some other people (elbow-rubbers) involved who lacked imagination. And the elbow-rubbers can only interpret business plans based on what they have seen. The typical response is "Oh yeah, I think I understand... Like "_so-and-so_", right?" They completely rule out the fact that it's intended to have a specific purpose. And, yet the elbow-rubbers can only make references of comparison, they lack the business savy to comprehend what has actually been written down for them and handed to them on a golden-platter. Very sad cycle of elbow-rubbing politics.
ReplyDeleteGroupon appears to be free-falling. Corporate headhunters are getting flooded with resumes from salespeople and techies who want to flee Groupon before it collapses.
ReplyDelete6:50 has a good point. I have no choice but to penny pinch these days, which means no meals out. No extravagant vanity boosters like a mani/pedi, massages etc. No vacations or jewelry. That's how most families actually live. Rather than indulge myself, I give a hand to friends who struggle even more.
ReplyDelete(Dead) Chicken and GroupOn are for those with expendable income. Not anyone I know.
There is over saturation in all digital advertising not just deals. This is a big problem with Gannett.
ReplyDeleteIf the local sales teams worked together with DealChicken and were actually held accountable to go and sell deals when they could, I think DealChicken would be in a much better place.
ReplyDelete12:14 PM,
ReplyDeleteYou are absolutely right.
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