You open up your inbox, ready to see what interesting activity LivingSocial will deliver today! A hip new restaurant downtown? An artistic experience? A great show at an indie theater? What’s today’s hidden gem… it’s… McDonald’s? Wait, what? That was my reaction when I opened my daily deal last week, total confusion at a LivingSocial deal for 5 Big Macs and Fries from good ‘ole Mickey D’s. And, it looks like I wasn’t alone, as shown by some of the Tweets in the image at the top of this post. The feedback ranged from surprise to disappointment, and even one declaration that the poster planned to unsubscribe. And yet, they sold almost 300,000 vouchers. So, where did LivingSocial go wrong? Does it really matter, since they sold hundreds of thousands of vouchers?
Identity Crisis. First, let’s talk about the identity crisis that this deal presents. LivingSocial is seen as young, hip, and a great way to try out an experience that might cost a little more than you’d normally pay for something you aren’t sure you’ll enjoy. LivingSocial gives you the chance to try new things, to round out your life experiences, and gain cool stories to tell your friends. And, McDonald’s? Not so much. With deals like this, LivingSocial customers start to doubt the brand they’ve come to know. They wonder if their trendy friend LivingSocial was lying to them all this time, that they’re really a boring, safe brand.
Meeting Customers’ needs. According to this article from Slate, LivingSocial sold out a million vouchers for a deal with Whole Foods in September, but managed less than 300,000 with the McDonald’s deal. Many of their customers are well-educated, high-earning, young professionals, so it’s no wonder the Whole Foods deal sold out! This market segment is looking for the next big thing, and LivingSocial provides the opportunity to hear about, and participate in, new experiences. They don’t need another outlet for cheap food from their childhood, and this deal didn’t meet their needs at all. You might suggest that LivingSocial was trying to go after a new market segment, but you don’t want to alienate your current customer base in favor of potential new customers. It’s much easier to keep a customer than it is to attract a new customer, so LivingSocial should think about meeting loyal customers’ needs.
Sending the wrong signal. In conjunction with meeting current customers’ needs, LivingSocial also needs to consider the signal this deal sends. They’ve now indicated that they’re having an identity crisis, and it makes many customers wonder where LivingSocial is headed. Are they still going to send me great deals to cool places, or should I expect junk in my inbox every morning? Is LivingSocial becoming all about the price, or will they still make couponing hip? Daily deals have brought coupon use back into the mainstream, but only because they were offering high-quality, and often luxurious, products and experiences. I don’t want to be seen as “cheap” by using a coupon, and I would seem especially cheap for using a coupon at an already cheap venue! Don’t make me look bad among my friends, LivingSocial!
In spite of seemingly high sales, I’d say this daily deal was a misstep for LivingSocial. The rest of the internet seems to agree… with the exception of the 300,000 who will be enjoying their McDonald’s Big Macs in the next few months!