It’s time to re-think Black Friday & Cyber Monday

Here’s why.

In the late 2000s, the United States ran one of the largest discounting (via couponing) experiments in entrepreneurial history.

A small startup based in Chicago came up with a radically different idea to help small businesses generate buzz, awareness, and customer acquisition.

Instead of encouraging them to run ads on Facebook, or helping these small “e” entrepreneurs launch creative discounting campaigns, this startup turned the age-old marketing tactic of couponing, digital.

These digital coupons were called Groupons.

Overnight, small businesses that ran Groupons saw a huge surge in business.

Hair salons, pizza parlors, physical therapy offices, and sandwich shops suddenly had lines out the door and down the street.

As a result, Groupon became one of the fastest-growing startups in history, climbing to an IPO just three years after the company’s founding at a jaw-dropping valuation of $13 billion.

Groupon lit the world on fire — and in the short term, seemed like the single greatest way of getting customers in the door.

10 years later, Groupon has become a thing of the past with a market cap of less than $1 billion.

What happened?

The category collapsed.

Turns out flash discounts don’t work.

Groupon’s story is a cautionary tale to companies that blindly discount their goods & services.

Every year, Black Friday comes around.

And every year, big and small companies all over the world enter a zombie-like state of transactional discounting (and transactional discounting is doomed to failure) opposed to relational discounting, which allows you to build direct relationships with your Superconsumers.

One is a coupon, the other is an intentional experience.

Same cost, different context.

👊🏴‍☠️

Christopher Lochhead

This post is based on the work of Category Pirates 🏴‍☠️