Are Social Coupons a Good Idea but the Wrong Track

Coupons are so 1950 | How to Carry the Idea Forward with Social Currency

Social Coupons via companies like Groupon or Livingsocial are a great idea, especially for a down economy. There are hosts of complaints or issues from both consumers or businesses. The complaints range from too much or unpredictable discounts for businesses to consumers running into issues with the businesses or staff who are struggling to service full paying customers or gain tips based on total value. The second problem, at least with Groupon, is that the sales and ad content are created by Groupon staff. This is the model for a traditional linear growth business, but does not allow a customer sustaining model of growth such as wikipedia or facebook where increasing users create increasing content. Additionally, the current popular favorites fail to reward someone for finding a new gallery or event that has no means or method to create a 'coupon'. 

The root of idea has several good points; local economy, saving money, and discovery of new clients or shops. The best combinations of these ideas come from two people I have worked with. The first is from Marc Fawzi. Marc suggested some years back that what the web needed was a currency, similar to the idea of a gift economy. He was trying to point out the failures of web 2.0 in the sense that it is difficult to compensate users for valuable contributions to sites such as Wikipedia. While some sites reward you witih some notoriety for generating interesting content, it rarely translates into monetary or some other currency that could be traded. Think AMEX points you can trade for service or prodcuts rather than just street cred.

Something like bitcoin may be a solution for this in the future. Bitcoin or these sorts of things should terrify central banks or the I.R.S. I think this is the next evolution of currency and trade in economics. It could be an interesting change for society to have people rewarded on their total contributions to the group. Everyone has passed on at least one opportunity to contribute because there was no or little compensation. You could answer that question or you could go on to another article. Maybe later.

Panera has an interesting restaurant experiment going where patrons are told to "Take what you need, leave your fair share". It is apparently working pretty well, occaisionally abused. Every market is going to have someone who cheats. The difference in an online social currency system is that it is more visible or measuarable than most traditional systems. Someone who claims too much credibitily or violates the rules will likely be self corrected similar to the character Anmark from The Moon Moth by Jack Vance.

The second idea comes from Sam Raman. Sam has been working on drawing on the local part of the business to consumer relationship closer. The challenge that any national company has is the ability to really connect with the local market. There seems to be only two ways to do this well. Yelp.com and Foursquare are one side of the local business attempts that have done reasonably well. The challenge I personally had with these sites is that many of my 'friends' live nowhere near me, so their opinions on a local restaurant are pretty useless. The social part of it is supposed to build trust, so it's hard for me to find local reviews that I would trust. 

Another way to is to have a local manager or franchise owner that is responsible for their local market. The idea is good, but the difficulty remains in franchise consistency, which is the same struggle Groupon is having with its ad copy writing. Sam is not alone in noticing the lack of local control or the results of local interest created by the dominance of national news and search.

The benefits and problems are fairly obvious, so how do we move forward with something that works? How do you get some sort of usable credit for a great story, video, or song that you publish? What can the Internet community do to convince you to contribute?

It is possible Google Wallet may morph into something. Rather than a complicated system of coupons, ad copy writers, and annoyed wait staff, imagine if you could gain points in your Google Walled by contributing valuable reviews that are voted on by peers such as at sites like quora.com. Simply put, Google rewards you for feeding them higher quality information with points in your wallet that can be used on apps or other sites that are willing to exchange the points. Amex and Amazon have a similar arrangement, although in a discussion with another collegue Marcus Pradel, he was quick to point out that the treasury department could quickly become upset about transactions it might miss being able to tax.

I think the idea of a social currency that could reward users for their contributions is great and hope it will emerge spontaneously. Maybe it would help us move some consumers into producers in our economy.