Lessons from Groupon's strategy for increasing revenue per email. For those organizations with large transactional email volume who depend on email marketing to drive traffic/sales. Read on the learn about industry best practices to lower send cost, improve deliverability and increase revenue per email. Challenges Addressed: #1 Internet trends and changes (ISP changes like Gmail introducing tabs in 2013, CASL 2014) #2 Mobile commerce will make up 29% of web sales this year and today nearly half of all email is opened on a mobile device #3 Marketing fatigue: Customers eventually begin to ignore due to excess marketing ads (i.e. The Law of Shitty Clickthroughs) Learn about strategies to: Develop email solutions in-house Optimize deliverability Invest in multi channel marketing This deck was lovingly assembled using publicly available information and makes no claims on behalf of Groupon. If you have any feedback, ideas or questions just drop us a line ---> marketing[at]brickstreetsoftware.com

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3 Secrets of Multi-Channel Marketing
LESSONS FROM GROUPON’S STRATEGY FOR INCREASING REVENUE PER EMAIL

2. OVER 200 COMPANIES COMPETE IN THE DAILY DEAL SPACE IN THE USA ALONE.
Yet Groupon maintains a leading competitive edge in their core business whilst expanding
into other markets. What can other deal sites adopt from Groupon’s marketing approach?

3. 53%
of Canadians are familiar with at least
one deal site.
42%
of these Canadians joined deal sites in
order to receive daily offers via email.
1,000,000,000
monthly Groupon emails.
53% 42%
September 6, 2012
Globe and Mail, Canada
loves daily deal sites,
even more than U.S.:
Survey
June 24, 2011
Email Expert, Groupon
Email Delivery Speed
Increases by 40% with
Certification

5. February 20, 2014
Recode, Groupon Crushes
Q4 Estimates, but Mixed
Forecast Drags Down Stock
Groupon, Groupon Q4 2013
Public Fact Summary
February 25, 2014
Brian Nichols, The Motley
Fool, Could Groupon Be the
Next Netflix?

6. Risks & Operations
“Our business depends on our ability to maintain and
scale the network infrastructure necessary to send our
emails and operate our websites, mobile applications
and transaction processing systems, and any significant
disruption in service on our email infrastructure, websites,
mobile applications or transaction processing systems
could result in a loss of subscribers, customers or
merchants.
If our emails are not delivered and accepted, or are routed
by email providers in a less favorable way than other
emails, our business may be substantially harmed.”
according to groupon’s management discussion and
analysis of financial condition and results of operations
THE RISKS TO GROUPON’S BUSINESS
Groupon, Groupon Annual
Report 2013

7. Challenges
Opportunities
Benefit
Invest in multichannel
marketing
Internet trends and changes (ISP
changes like Gmail introducing
tabs in 2013, CASL 2014)
TRENDS AND CHANGES MOBILE COMMERCE MARKETING FATIGUE
Mobile commerce will make up
29% of web sales this year and
today nearly half of all email is
opened on a mobile device
Customers eventually begin to
ignore due to excess marketing
ads (i.e. The Law of Shitty
Clickthroughs)
Sales and loyalty improve when customers receive fewer and more relevant offers
Develop email solution in-
house
Optimize deliverability
1 2 3
February 20, 2014
Recode, Why Groupon’s
Gmail Problem May Be A
Good Thing
May 13, 2014
Internet Retailer, US
M-commerce Will Make
Up 29% of Web Sales This
Year
June 12, 2014
Marketing Land, Report:
Climbing To 48%, Mobile
Email Open Rates Nearly
Overtake Desktop in 2013

8. (1) Develop email solution in-house
License a messaging solution on a per-
customer-record pricing model instead
CPM: Cost per thousand messages sent
APPLICATION APPROACH
Custom build a sending system in-house
• Extra security of having entire database in-
house
• Cloud servers like Amazon Virtual Private Cloud
(VPC) provide the same security and integration
options as on-premise plus speed and superior
economics
• Build in feedback loop through surveys and
analytics for better defined segments and
greater personalization
Nearly all large-volume senders pay ESP vendors
on a CPM model, essentially trusting their most
valuable asset — their email list — to a third party
sender. For Groupon, developing Mindstorm helps
broaden the relevance of emails and optimize
revenue per email.

9. “
The decrease in cost of revenue was primarily
driven by reduced email distribution costs,
primarily due to the migration to an internal
email distribution platform.
GROUPON ANNUAL REPORT, 2013

10. Is optimal send time the same across different
segments?
Deal sites release limited-time and location-specific
offers, making timing and inbox placement critical to
conversion optimization. Groupon uses Smart Deals email
personalization to customize the deals subscribers receive
every day and includes input subscribers can submit on their
interests and curiosities.
Personalizing content to micro-segments, through a
combination of analytics and feedback, lessens the junk
subscribers have learned to ignore.
CUSTOMER DEMOGRAPHICS
DATA IS KEY TO IMPROVING RELEVANCE 73%
61%
25%
are women, who are key to
reaching families where they’re
often primary household decision
makers
have college education and 20%
have a graduate degree
have an annual household income
above $100,000
Groupon, Groupon Annual
Report 2013

11. (2) Optimize deliverability
Certification, monitoring solutions and customized
consulting may sound excessive, especially since
email is only one acquisition channel within a
marketing mix — but for volume senders, like
Groupon, even a 6% difference in CTR is extremely
valuable.
Factors Impacting Deliverability:
Managing campaigns across multiple ESPs with
a seed-based deliverability monitor allows you
to test local ESPs in international markets and
optimize send speed.
Experimenting with multiple vendors and SMTP
relays increases email marketing performance
because different ESPs may experience different
soft bounce rates depending on the ISP of the
email recipient.
APPLICATION APPROACH
• ISP throttling (delivery speeds were slowed
down by receiving servers)
• Delivery performance per IP address and per
location in the world
• Send speed times
• Optimizing for inbox placement between 6 and
9am locally across the world
Return Path, Groupon
Case Study
Example of an ISP: Gmail, Outlook, Yahoo

12. (3) Invest in multichannel marketing
APPLICATION APPROACH
Mobile is everywhere. To lead as a mobile-first
company Groupon had to invest in acquisition
methods beyond email. User experience is central
to their m-commerce and merchant apps and
reflects in 5-star user ratings. To date, over 70
million people have downloaded a Groupon mobile
app.
Make customers feel recognized with relevant
content and experiences
• Markets categories of deals rather than just
one per email
• Reward loyalty within transactional emails
• Map the buying experience across all channels
• Use customer data to deploy triggered
campaigns across email, mobile push and SMS
• Provide transparent, helpful and authentic
support through all channels
Coordinate communication across channels,
devices, and activities
Real-time responsiveness

13. Mobile customers continue to be more
engaged than web-only customers,
purchasing more frequently and
spending more.
50% of global transactions were
completed on a mobile device as of
December 2013.
Groupon, Groupon Annual
Report 2013

14. “
ERIC LEFKOFSKY, CHAIRMAN OF GROUPON
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We still send far too many irrelevant
emails. That’ll change in 2014.

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