The great Groupon Cup Cake Fiasco

by Adam Bean on November 27, 2011

Warning!!! This is a true story!

And after reading it you are going not going to have the luxury of being able to say…

“Oh poor me that didn’t work” when your Small Business Marketing Ideas don’t quite go to plan.

Why is that Beanie you ask?

Because today my friend I am going to show you a real life example of a small business marketing idea, that went terrible wrong. (Or did it?) And over the course of my next couple of posts,I am also going to show you exactly how it could be turned around to this business owners advantage with some smart effective marketing.

The other day a friend of mine shared this article on Facebook => Large Groupon Discount Leads to Excessive Cup Cake Baking via Mashable.

Now this is a quote from the business owner (via the Mashable article) with her perspective on what happened…

“Without doubt, it was my worst ever business decision. We had thousands of orders pouring in that really we hadn’t expected to have. A much larger company would have difficulty coping,” said Brown, who lost up to £12,500 ($20,000) on the deal.

Mmm apparently she received 8500 order’s. So she now has the contact details (because she has to send them the cup cakes) of 8500 highly targeted customers. What is that worth? I mean if you had to advertise and bring in 8500 new customers via traditional media (Radio, T.V, Newspapers) what would the cost be?

So let’s do a quick re-cap, what have we got to work with here?

  • 8500 highly targeted customers that are proven to buy cup cakes on-line
  • A $20,000 investment that we made to obtain their contact details

So it has cost us $2.35 per customer for this promotion. Okay it’s time to turn this thing around, and cash in on this fiasco!

In the next post we are going to look at the following….

  • How to use the Groupon story to make a connection with the people who purchased the cup cakes
  • How to get as many of the purchasers email addresses as possible (This is one way we are going to get that $20,000 back)
  • Run a competition that will create a huge amount of Social buzz on-line

So who still thinks that this is the “worst business decision ever” that this cup cake business owner made? Would love to hear your opinion in the comments section below.

Cheers Beanie

The Social Tradie

 

 

 

{ 8 comments… read them below or add one }

Leonie November 29, 2011 at 2:14 am

Great reframe Beanie!

So important to see the glass half full.

…And you’re right. She now has a massive, HOT list. Woohoo for her!!

Adam Bean November 29, 2011 at 6:41 am

Spot on Leonie, I think she has completely over looked the life time value of a customer! There is so much you can do with this, that I am going to turn it into a product launch!

Kama December 1, 2011 at 2:29 am

I see wonderful opportunities here and a lot of learning. I look forward to part two.

Adam Bean December 1, 2011 at 7:52 am

Hey Kama
I had better get on move on with post two, thanks for stopping by.

Cheers Beanie

Annie Infinite December 1, 2011 at 8:36 pm

With you there Adam they are starting to think like entrepreneurs and see everything as an opportunity to not only learn but prosper! So looking forward to the next few posts 🙂

Lisa Wood December 2, 2011 at 11:20 am

Hi Beanie,

Interesting concept…and a great way of looking at! Looking forward to reading what happens next!

Cheers
Lisa

Adam Bean December 4, 2011 at 6:22 am

Hey Lisa, Part two will be up very soon.

Cheers Beanie

Adam Bean December 4, 2011 at 6:23 am

Hey Annie
It does all come back to how you look at it.

Cheers Beanie

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