The Perils of Being a Category Leader

A friend of mine, Brennan Knotts, recently pointed out in a post about the 22 Immutable Laws of Marketing, that marketing success requires mind-share. Mind-share means owning a word in the market’s vocabulary which, when spoken, evokes memories of your brand. Often, the best way to achieve word-ownership status is to be the first entrant in a market.

However, there is a dark side of the market leadership coin you must be prepared to handle.

Groupon is living the dream of mind-share leadership in its ‘daily deals’ category. Sure, there is a growing swath of me-too competitors (most notably Living Social, infused with backing from Amazon), but Groupon was the first. After breaking open Pandora’s box of daily-deal mania Groupon also became the fastest growing company in the history of mankind.

Talk about pressure.

Groupon’s mind-share ownership combined with an almost reckless growth trajectory have illustrated the perils of defining a market segment: constant inspection under the public microscope. Every competitor, partner, client and end-user are examining Groupon’s successes and failures at a magnitude of 10.

Enduring the Heat
Considering the obscene volume of business Groupon is managing worldwide, its blunders are astoundingly few and far between — and well-managed when they occur. However, with a media mindset that says only bad news is good news, every one of Groupon’s missteps land on front pages (i.e. Super Bowl commercial controversies, Japanese New Year debacles, and Valentine’s Day system glitches).

Groupon has taken an admirable and well-advised policy toward honesty, apology, and customer retention when handling snafus like these. Negative press befalls the 800lb. gorillas in every market and Groupon is doing a superb job of taking the heat. In fact, they’re setting a wonderful example for the rest of the corporate world to follow.

They, like anyone else who enjoys major market leadership, must simply endure the occasional high-profile negative attention and continue to prove their worth to a happy base of customers and clients.

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