Avoiding a letter from a federal agency like the NLRB is enough to justify an attorney’s expense. I had the opportunity recently to consult with a local tech company on their employee handbook, but even a big document like that isn’t effective insulation. The feds decided in in this instance that the company’s rules regarding all the after-hours activity like Facebook and blogging were too broad. This was a case where the decision was justified by the company’s internal documents that the US government decided was unacceptable.
Your takeaway as a small business leader is that the company involved in this issue is not a small business, but a company with a billion in annual revenue. The Internet and globalization is already democratizing the playing field between small and big business. Don’t give away your advantage by not working with an attorney. This company will keep rolling. Yours may not faced with a similar financial settlement.
Groupon is enduring some well-deserved criticism this week for its edgy Super Bowl commercial featuring actor Timothy Hutton that made light of Tibet’s struggles with China. American consumers overwhelmingly rejected the ad while continuing to use the service (herein called The GoDaddy Effect) and the company best known for being the startup that earlier spurned $6 billion of Google’s money created another head-scratching moment.
But what impact does this company have on a small business, maybe your small business, when one of those 50% offers launches? Almost all Groupon customers ask for a second promotion according to a video on the company’s website. Local merchants now receive mobile applications, free marketing copywriters and tools like a capacity planner.
Capacity was the issue I experienced with local merchants. The worst was a camera store with an offer that swayed me to convert some old film to DVD . My son picked up the order and paid with the Groupon, which was about $6 more than the cost. The cashier did not offer a store credit or offer to sell a second conversion and apply a $6 credit. Nearly half of the $15 savings evaporated so I called the store. Pause and reflect.
Groupon brought me in when I wouldn’t have looked around for that old birthday party footage. Then the store had a chance to wow me with their services and pick up a second conversion plus who knows how many more future orders? Instead the clerk said no. The manager went further, telling me that “Not everything is free just because you have Groupon”. Those frustrated line staff comments are common on web complaint boards.
But now I had a mission so I called the small chain’s headquarters and was told there was no customer service department and “these questions” were best handled at the store level. But now I was more focused on the store manager’s attitude and I ended up in the voice mail of someone in store operations. That person never called back even after a second message was left.
So the fallout for the store is even worse. Now I’m not only dissatisfied, but when someone comments on the DVD, I tell them to buy online because the local chain has “awful service”. That is the essence of a merchant’s Groupon dilemma. The company says all will be well if the merchant is “honest” about their ability to handle big volumes and convert casual consumers to long-term customers.
Your takeaway as a small business leader is to think strategically, not about cash flow or other tactical matters, when considering any coupon service.
If you don’t have an upselling, customer-centric culture and your business has tight margins, inviting a horde of discount-loving customers who have no loyalty to your business is an ineffective strategy.
Everyone is hurt by “Do Not Track” and other well-meaning privacy initiatives that hurt the economy, reduce the number of online options consumers have for news, entertainment and research and could even change pricing of mobile phone, Internet, television and other plans.
Most business leaders would agree that any short-term gains generated by compromising customer privacy would be offset by reputation damage and may eventually drive an organization out of business. But consumers may not understand what happens when they install ad blocking software or take advantage of Firefox’s proposed “do not track” flag.
By informing companies that they don’t want their activities tracked or they don’t want to see advertising on websites or smartphones, consumers will block the activity that allows organizations to provide free and subsidized services. Google said today that they would make code available for Internet developers to embed this opt-out mechanism in future browsers, but even The Washington Post conceded that doing so might cause repeated or less relevant ads.
Smart advertisers aren’t tracking you–they are tracking the activities of a computer session to serve better, more relevant advertising. That tracking leads to better advertising targeting which means the companies sponsoring the information and connectivity are more profitable and can continue offering free services.
Imagine a world where you pay a membership fee for access to a search engine or for Facebook or to watch a video. Advertising pays for all of these services and more, including subsidized telephone services, broadband pricing initiatives and a global economy where a small business in Europe can compete with a multinational conglomerate in Los Angeles for the same consumers in South America.
You must know that companies have to be paid. Someone pays the employees, pays for the lights to be on, pays for the things we all enjoy now free. Forget free applications and consider how your daily surfing habits would change. Email would likely remain free, but would probably have more restrictive sizes that wouldn’t allow pictures or files to be transmitted. Even browsers are advertising or product supported. Two popular browsers, Mozilla’s Firefox and Google’s Chrome, are directly supported through donations from Google, an organization that creates almost all of its revenue from online advertising. You don’t pay $29.95 to buy browser software as you were expected to during the web’s nascent days.
And that’s true in so many situations because online advertising is affordable and effective. I know that because I help small businesses and non-profits generate more revenue from their online advertising efforts. That profit means they can create new jobs, keep prices stable a longer time and fund philanthropic activities.
Today’s Wall Street Journal print edition featured a story about Mozilla’s “do not track” future capability on the front page of its Marketplace section. Further inside the section and no coincidence was an article about The New York Times’ plans to begin charging consumers for access via Amazon’s Kindle and the Apple iPad. The Journal called this “the biggest test to date of consumers’ willingness to pay for news they’re accustomed to getting free.”
Providing bandwidth, content and creating websites costs money. When consumers realize that some of their favorite activities may now be unavailable for free, it may be too late to restore some of those services. Online ads are effective thanks to the tracking mechanisms that make ads appeal to the proper audiences. If ads become random and less efficient, you just may pay for the privilege of telling law-abiding companies that you don’t want to be tracked while organizations who don’t follow the practice or are not based in the United States will do as they please. Ad blocking and “do not track” initiatives are bad for America’s businesses and worse for America’s consumers who use free Internet services.
Source: “Web Tool on Firefox to Deter Tracking”, Wall Street Journal, 1/24/11
Source: “Times Prepares Pay Wall”, Wall Street Journal, 1/24/11