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Groupon Client Goes Public With Beef at SXSW, Staffers Scramble

[Photo: Flickr user Carol Pyles]

Groupon

Sunday's Groupon panel on the Fast Company and PepsiCo stage took an unexpected turn when Travis Kalanick, a longtime Silicon Valley entrepreneur who runs online car service Uber, spoke frankly about his negative experiences as a client of Groupon—and several Groupon staffers in the audience took issue with the story he told.

The panel was framed as a post-game discussion of Groupon's own panel on its creative, quality-based approaches to marketing and copywriting, which are helping the company keep market share in the face of an army of clones. But it quickly got real.

"In marketing, in the stories you tell, you guys are nothing but winning," Kalanick said. "But there is such a disconnect with operations." He said that Groupon representatives had promised him primary placement and not delivered, didn't run the offer on the dates he wanted, handed him a data dump in a clunky Excel spreadsheet, and gave him an initial estimate of proceeds from the offer that was ten times higher than what the group deal actually delivered. "That's money I spent to put cars on the road that we didn't need."

Darren Schwartz, Groupon's SVP of sales, above, grabbed a mike in the middle of the panel to respond that Groupon's hiring a team of merchant managers to improve the oversight process from sales to the completion of an offer.

"The reality is that Travis has identified the same stuff we have," Schwartz told Fast Company afterward. "We need to merge our marketing excellence with our operations excellence and get it all to the same level." They're rolling out new tools to help local businesses better track their ROI from each offer.

It's too early to tell whether Groupon is simply the harbinger of a huge trend in social consumption, or itself the winner of the race. Its ultimate success or failure is sure to rest on the quality of its relationships with tens of thousands of local merchants as well as customers. In this way all business, like politics, is local. That's why I was a little taken aback to hear Schwartz describe Groupon's approach.


Travis Kalanick spoke with Darren Schwartz after the panel

"We want to help them not only understand how to use Groupon," Schwartz said, "but how to run their business better." Whoa, I said. Does the local pizza guy who's been around for 20 years really need you to tell them how to run their business?

Follow @fastcompany on Twitter; see live coverage of SXSW.


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