Groupon

The Dragonfly Effect explores the idea that by integrating greater-good goals in their business plans, companies will make more money and create more good. Specifically, Groupon was successful in creating value and fun for both consumers and corporations.

Andrew Mason, founder of Groupon, observed that local merchants were willing to offer deeply discounted goods or services if they could be assured a certain amount of demand. He developed Groupon as a social commerce service to aggregate consumer demand and secure unusual discounts through a collective action platform.

Fun and Value for Consumers.

Consumers learned about the deal-of-the-day through Facebook, Twitter, and email. To stand out and avoid the customer burnout that often accompanies frequent marketing messages, Groupon hired Chicago-area comedians to write copy. Groupon grabs attention by exposing people to great local deals on things they want. Shared incentives among potential buyers and their friends lead quickly to engagement.

Fun and Value for Merchants.

Groupon exposed many local merchants to the new role social media played in marketing. With this tool, merchants were able to actively participate in the new online trends, gain new customers, and thus make more money. The fact that merchants only pay for Groupon when an offer reaches critical mass made many of them willing to try it.

In every city, there is one primary deal of the day and one side deal of the day. By the end of 2009, Groupon was in almost 30 major cities and had sold nearly 1.2 million Groupons, saving consumers about $60 million.