
Groupon CEO Apologizes For Poorly Executed Offer In Japan - patio11
http://info.groupon.jp/topics/20110117-515.html
======
patio11
Aside from missing the opportunity to bow a time or six, I think this was
close to perfect for execution of an apology (both by Japanese standards and
for companies generally). Heartfelt apology, total acceptance of
responsibility, comes straight from the top, makes full amends to customers,
identifies specific changes made to address problem in the future, closes with
thanks to customers.

Edited to add: For extra credit, it might have been worthwhile to apologize to
the merchant for failing to prevent a situation which caused their wares to be
presented in an unflattering manner.

This probably stands reality on it's head, but what actually happened on one
particular day in Tokyo is not maximally relevant to Groupon's Japanese
business, and having a reputation for being magnanimous and savvy to how the
game is played can only help them in the future. Again, though, I think they
did really well.

~~~
jaywalker
I doubt this is OK by Japanese standards. Did anyone commit suicide?

~~~
cperciva
If you're serious: patio11 has lived in Japan for many years and I think it's
safe to say that he has a good understanding of Japanese cultural norms.

If you're not serious: This joke is in extremely poor taste.

~~~
CamperBob
He hasn't lived in Japan very long at all if he doesn't recognize that this is
one of those stereotypes with some significant basis in reality. Japan has
almost twice the US's suicide rate, and it is indeed an act with heavy
cultural significance.

Suggest removing sticks from nether regions... both of you.

~~~
po
If you read Patrick's response you will see it is polite, realistic and
nuanced. Your comment: not so much.

Japan has twice the suicide rate which is still not a lot. It's about the same
as Finland. This is not a subject that can be (nor should be) easily reduced
to a "Japanese people commit suicide a lot" kind of stereotype, so lets not do
it.

[http://www.who.int/mental_health/prevention/suicide/suicider...](http://www.who.int/mental_health/prevention/suicide/suiciderates/en/)

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klne2
Japanese reaction on news announcement forum:

"Apologize in Japanese." ← Most popular

"Apologizing in a shirt? Wear a suit, you trash."

"Groupon is a fraud outfit." ← Due to other controversies

"Groupon CEO is a kid? No wonder..."

"An American's apology has no meaning. He was even wearing casual clothes.
This was more like a an excuse rather than an apology. He didn't even bow. He
made things worse."

"Groupon is run by a foreigner?"

"The youtube account has videos of them abusing a dog. I'm reporting this."

Other controversies: People buy restaurant coupons with an expiry date in X
months. They call to make a reservation and are told that they are fully
booked for X months.

People are sold chinese made gyoza. This fact is not stated in the
advertisement which has some fishy statements. This is particularly sensitive
because chinese foodstuff is worthless in Japan.

~~~
patio11
For people reading this, just remember, /b/ didn't like the apology either.

~~~
bane
My feeling is that /b/ has a surprisingly high density of Japanese cultural
experts -- what with considering the large number of high quality Anime
subtitle work coming out of parts of that community.

~~~
ramchip
I think they usually hang out around other, Japanese-related boards. /b/ has
little respect for anime or anything in general, and it's almost impossible to
organize anything in the huge, fast-moving mess it has become.

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radioactive21
Some context for those who want a quick summary of what happened and why the
apology.

\- In Japan during the first few days of the new year, they traditionally cook
meals called osechi-ryori to celebrate. But nowadays, people just buy premade
meals on line and have them delivered.

-Groupon advertised with a company called Bird Cafe to have a special discount on the meals.

-Bird Cafe could not handle the amount of orders, and delivered late and with bad quality. When the meals arrived they were no where close to the advertised pictures. Pretty much it was like ordering a hot meal, and what was delivered was a microwaved frozen dinner.

Many customers were outraged and the blogs lit up in Japan about the mistake
on Groupon's part.

The video is about apologizing for the mistake and talks about how to ensure
such quality issues do not happen again. Mostly by making sure the companies
they work with can handle the orders and uphold their product as advertised.

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redthrowaway
Watching this makes you wonder what stops all companies from responding this
way when they screw up. Is it really something as cynical as the lawyers
running the show? I don't get it. A heartfelt apology goes such a long way
towards rebuilding customer trust, it's a shame that more people aren't
willing to lay it on the line like this. Compare this response to Kevin Rose's
handling of the Digg v4 disaster. We all know what happened in the latter
case, but I wouldn't be surprised if this helps, rather than hurts Groupon.

Class act.

~~~
SocratesV
A lot of people cannot accept the fact that they or those under their command
commit mistakes. Even if they didn't do it personally, they have to take
personal responsibility for those under them, for the good and for the bad.

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fookyong
I'm a big fan of groupon, but this situation is going to repeat itself, I'm
sure.

Recent example:

<http://www.groupon.jp/deal-detail/cid/4054>

For those who don't read Japanese, that's a mom&pop-like Thai place doing a
500-yen ($6) all-you-can-eat coupon.

They sold 3500 coupons.

I just can't fathom the economics behind that one.

~~~
jbm
I can't believe I'm defending Group on but.. the normal price for that set is
1000 yen. Furthermore, it's for the lunch menu (ランチバイキング) and the time
restriction is such that I doubt they'll ever have to honour all of the
coupons. (Furthermore, they are cooking in bulk and you are stuck with
whatever they have; I doubt they will strain themselves with the deal)

I can think of a few places that are all-you-can-eat (tabehodai) for 1000 yen.
I wouldn't bet on the quality of food, but sometimes you luck out. 500 is
insanely cheap, but it is near the break-even point (if you aren't including
rent)

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SHOwnsYou
Groupon also takes ~50% of the total selling price.

So you are really looking at 250 yen; Around half the break-even point by your
estimates.

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cperciva
Google translation link (somewhat intelligible) for the benefit of people who
can't read Japanese:
[http://translate.google.com/translate?u=http%3A%2F%2Finfo.gr...](http://translate.google.com/translate?u=http%3A%2F%2Finfo.groupon.jp%2Ftopics%2F20110117-515.html)

~~~
patio11
My bad. The video is in English -- watch that and you'll get most of the
benefit.

The other Japanese text reads (my rough translation, you get what you pay
for):

To our customers who ordered Bird Cafe [n.b. name of advertiser]'s "Kinsei
Osechi" [n.b. name of product -- osechi is a a food box delivered at New
Years], related parties, and Groupon's fans: we are sorry for having caused
you trouble with the Kinsei Osechi Groupon offer. Our CEO Andrew Mason,
founder of Groupon, explains how Groupon will take the utmost measures to stop
similar incidents worldwide in his apology message:

Video goes here.

Not only Groupon Japan but all worldwide Groupon companies will take
corrective steps to prevent this sort of occurrence from happening again. The
measures include:

\+ Strengthening pre-deal investigation of merchants

\+ Improving the setting of deal size limits [to prevent overwhelming
merchants' ability to deliver]

\+ Establishing a dedicated customer support office for purchasers of Groupons

\+ Improving training of employees and our internal management systems so that
our customers and merchants can trust us sufficiently to do business.

Thank you for using Groupon. We hope to continue earning your trust in the
future.

[Transcript of video begins here. You can listen to English.]

~~~
tuhin
One of the most important and I guess up until now overlooked point is setting
deal size limits in close collaboration with the merchants. For only they know
honestly how many of the advertised deals can they deliver till it starts to
affect the quality.

As for apologizing to the merchants, I am assuming that they must have known
all the way along about how many orders were they capable of handling before
they had to resort to delivering that what was not the same as the advertised
deal.

~~~
patio11
:As for apologizing to the merchants, I am assuming that they must have known
all the way along about how many orders were they capable of handling before
they had to resort to delivering that what was not the same as the advertised
deal.*

I think that assumption is perhaps optimistic. Your average local takeout
place is not Toyota: they probably run things mostly on feel, rather than on
having a rigorously documented and optimized process, and it is highly
unlikely they've ever thought through capacity planning for "Can you take five
times your busiest day ever? Can you take ten times your busiest day ever?",
because for traditional businesses that just doesn't happen. Groupon's
strategy for addressing this apparently includes communicating to merchants
that Groupon is capable of overwhelming them past anything they have
previously experienced.

~~~
po
I've heard a lot of people who are mad at the merchant and think it's their
own fault for accepting so many orders. That may be true, but there is a huge
conflict of interest for Groupon. They get a chunk of the money for each deal
so I can only imagine hey push the merchant to offer as large a deal as
possible. I would love to see how their sales staff operates. Groupon's
interests are pretty aligned with the customer; they probably view merchants
as upstream suppliers who need to be squeezed for maximum profit.

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jwr
I've done quite a bit of business in Japan and in my opinion this is very well
done. Well, there could have been more bows, and the word "apologize" could
have appeared more often, but overall this was a sincere apology, which really
counts.

When I started watching the video I was afraid of an insincere or an
incomplete apology ("…and if anyone feels offended, we apologize…") which
would be a complete disaster, especially coming from an American speaking in
English.

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mise
"This restaurant has been optimized against the Slashdot effect."

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facuppi
Many businesses jump into offering deals on social buying sites without
realizing the potential amount of customers it can get them. The truth is
business owners should first of all make sure the deal is worth doing, since
sometimes they end up losing money due to the huge amount of people that buy
the deal. Besides, getting so many customers all at once, requires businesses
to hire extra help, make sure they have enough stock of whatever they sell and
basically be ready for handling a lot of people all at once without these
disasters happening. I read a good article on what to take into consideration
before jumping into offering a deal in sites like Groupon
<http://bit.ly/fd0B6E>.

~~~
Luyt
That shortened URL points to [http://blog.pinggers.com/2011/01/8-tips-for-
your-business-to...](http://blog.pinggers.com/2011/01/8-tips-for-your-
business-to-survive-a-groupon-like-deal/)

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skbohra123
Watching this video, pretty much tells why Groupon is going so fast. This is
the way one should treat his users.

