Groupon SA focused on customers
2012-09-20 14:35
Cape Town - Groupon is intent on delivering customer service as it drives to become a major e-commerce player in South Africa.
The group buying site gave reporters a look behind the scenes at its operation in Cape Town and said that it was focused on customer satisfaction, even though the company is often seen as a middleman.
"That's one of the biggest challenges that we face: We're dealing with a partner with whom we entered into a legally binding agreement with the best possible intentions," joint CEO Daniel Gausco told News24.
The company said that it actively engages its users on social networks because it wasn't a traditional type of business.
Online users usually have a higher tendency to complain about poor products and service offerings on social networks and Groupon is determined to responsive on popular platforms.
Sensitive
"Is social media; is Facebook just a fad; is there value there? As a social commerce business, we have to be very active in engagement," co-CEO Wayne Gosling said.
The group buying site is the quickest company in history to $1bn is value, but the CEOs are more concerned with customer feedback than share price.
Groupon sells about 1 000 deals per day globally and in SA it operates in 10 cities. The company is particularly sensitive about retailers that don't adhere to the contract they have signed for consumer deals.
"If that partner is for whatever reason doesn't deliver what they agreed to then we sit with that issue; it's our customer," said Gosling.
There are about 120 staff at the Cape Town office and the company employs capacity monitors who check on retailers for compliance with the deals as well as a division to check all aspects, prior to a deal going live.
"Prior to a deal going live, we have a quality assurance team checks the details of every deal. From the product side, they'll get samples in and check that the product is actually to a standard, that it doesn't infringe on trademarks; it's of sufficient quality, sufficient stock in the country, that reviews are in place," said Gausco.
Growth
He conceded that problems with suppliers and refunds sometimes arose, but was quick to add that the company was constantly trying to improve its systems.
"We've learnt as we've gone along. We've realised we've got to be far more active in this space."
"If we don't feel that that partner is able to deal with that, despite all the checks we take, then we'll refund those customers," Gosling added.
Despite that fact that the share price of the company has tumbled over the last year, nearly erasing half its value, both CEOs rejected that suggestion that the firm was stagnating.
"I'm not too concerned about share price is or what the valuation of the business is because we've demonstrated where we're going in terms of innovation, development; growth that's positive," said Gausco.
As an example, he pointed to the eight new employees in training and said that the firm receives around 800 unsolicited phone calls a day from prospective partners, most of which are rejected.
The company said that it will take time for its marketing strategy to become accepted by mainstream marketing professionals but it has already chalked up victories and vendors don't pay upfront.
Ambition
Groupon typically takes a 50% commission on sales, but Gausco said the number was negotiable.
"We have different mixes and negotiations, but it depends on the brand and the position. But ultimately, we've got to generate revenue to sustain the business."
Both Gausco and Gosling demonstrated their ambition to take on established e-commerce players in SA and moved the company to focus on travel deals.
They will also shortly launch a "store front" site that will offer products to consumers.
"Groupon wants to become the operating system for business. It's become a holistic parcel that we give to vendors," Gosling said.
- Follow Duncan on Twitter
