Do Social Deal Sites Really Work?

Topics: Harvard Business School, Great white shark, Shark Pages: 7 (2124 words) Published: June 2, 2013
Case Study



A theme park operator considers whether the boost in ticket sales is worth the trouble. by Marco Bertini, Luc Wathieu, Betsy Page Sigman, and Michael I. Norton

The Experts

Gideon Lask is the founder of BuyaPowa, a uK-based social commerce business.

Do Social Deal Sites Really Work?
he sales reps from DailyDilly had just finished their rollicking video presentation, and the laughter in the meeting room was starting to subside. Ruth Davison, the marketing director of Flanagan Theme Parks, was still smiling when she finally spoke. “I’m thoroughly impressed,” she said. “This would give us the marketing capabilities we’ve always wanted.” Will Eastman, Flanagan’s operations director, was beaming. He had suggested doing the promotion with DailyDilly, a fast-growing Australian social-couponing company similar to Groupon and LivingSocial. “Then I think we’re ready to make a decision,” he said. Everyone looked at Allie James, a consultant decades younger than Will and Ruth. Allie had been working with Flanagan for just over a month. She knew she had to kill the DailyDilly initiative but was reluctant to do it with the reps present. “Let’s discuss this off-line,” she said. Will slapped the table. “Come on,” he demanded. “We’re here now.” The DailyDilly reps became wide-eyed. Allie took a deep breath. If Will was going to push her, she’d be blunt. “No, then,” Allie said. “It’s not on.” Will pushed his chair back and walked out of the room. The reps started to review their presentation, but Allie stopped them with a wave of her hand. Ruth, no longer smiling, told them all she was sorry and stood up to escort everyone out. Allie knew she had just made some enemies. Half an hour later, Ruth stopped her in the corridor. “So you’re still not convinced?” “Roddy asked me to weigh in on DailyDilly for a reason,” Allie said. Roddy Brennan, Flanagan’s managing director, had retained her from Gold Coast Partners, one of Australia’s top management-consulting firms, with a mandate to improve the May 2012 Harvard Business review 139

Al Bhakta is the Ceo of Genghis Grill, a restaurant chain based in Dallas.

IllustratIon: Brett affruntI

HBr’s fictionalized case studies present dilemmas faced by leaders in real companies and offer solutions from experts. this one is based on the HBs Case study “What’s the Deal with livingsocial?” (case no. 512-065), by Marco Bertini, luc Wathieu, Betsy Page sigman, and Michael I. norton. It is available at


customer experience at the company’s six theme parks in Australia and New Zealand. Ruth glared, and Allie had to summon all her strength to muster a defense. She began: “I know everyone’s getting caught up in the group-buying mania. DailyDilly sounds fun, but a promotion like that would hurt the customer experience at the parks and damage your company in the long run.” “Are you hungry?” Ruth suddenly interrupted. Allie was startled. “Why?” “I am. Let’s get lunch.” “I brought a sandwich—” Allie said. “Never mind your sandwich,” Ruth said. “I’ll treat.”

Ruth’s was a forceful personality, and Allie soon found herself in the car park. “Buckle in,” Ruth said. Allie felt a little as though she were strapping into Flanagan’s signature zero-gravity ride. What was it called? Ah, yes—the Great White Shark. She and Roddy had ridden the Great White Shark together a few weeks back, when he was showing her around Mermaid Landing, the company’s flagship park. He had screamed and laughed the whole time, and that tickled Allie. Roddy obviously had the heart of a kid and a real love for his product. But Flanagan was struggling. The lines were shorter than those at competing parks. The problem wasn’t the rides and attractions—they were state-of-the-art. In Allie’s opinion, customers were being turned off by careless service, crowded conditions at the eateries, poorly managed traffic flow into and out of the parks, and awkward scheduling of shows....
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