Groupola: iPhone deal backfires
By Jason Hesse, published 62 days ago in Sales & Marketing.
Groupola promised to offer the new iPhone 4 for £99. Was the Groupola deal too good to be true? It definitely wasn't a con, but has the deal caused more damage than good to Groupola? What can you learn from this?
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Groupola had 200 handsets to sell, but over five million people tried to log on to Groupola's site. How did the deal go wrong?
When Groupola, the group buying site set up by the already-controversial entrepreneur Mark Pearson (who's also the founder of MyVoucherCodes.co.uk), sent a marketing e-mail around claiming to offer a number of SIM-free iPhone 4s for the knockdown price of £99 – as opposed to its normal retail price of £499 – the deal seemed too good to be true.
And yet that seems to be the case for many this morning. Groupola’s website immediately crashed under the strain of the high-volume web traffic, and rumours are circulating on Twitter that the whole deal may have been a con.
This is definitely not the case. I spoke to one of the lucky buyers, Dean O'Brien, a recruitment administrator based in London, who confirmed that he'd managed to bag one of the iPhones:
"The site wasn't working at 9.30 this morning, so I went into work and tried again," he told me. "At around 10.30 I managed to get through to the deal. The deal area still wasn't loading properly, so I refreshed again and it seemed to work. So I put in my credit card details, and a couple hours later got an e-mail confirming that the deal had 'tipped', and that I'd be sent my iPhone in the next few days."
Although O'Brien was ecstatic at being one of the lucky few, the unlucky are less forgiving at Groupola's web problems and now Mark Pearson is feeling the wrath of the Twittersphere. Just search for "Groupola" in Twitter, or have a look at some of the comments below.
But that's not the point. It isn't about the deal being real, it's about how Groupola managed the process: poorly. Although sometimes a controversial figure, Mark Pearson is a clever entrepreneur and should have planned this better.
Poor planning
Offering the new iPhone 4 for £99 was always going to attract a huge amount of traffic to Groupola. The iPhone 4 has been sold out from most O2 shops throughout the UK, and it's become Apple's fastest-selling product thus far.
It therefore made sense for Mark Pearson to try and capitalise on this through Groupola. But he should have known that he would never be able to satisfy demand, it was always going to outstrip the supply massively. In fact, so much so that Mark Pearson should have known that the vast majority of customers would be leaving Groupola with a sour taste in their mouthes.
He also should have predicted the massive onslaught on Groupola's web servers. Groupola should have expected a massive peak in traffic, and not found itself overwhelmed and lost. Certainly from my personal experience, although I was very excited at the prospect of bagging a £99 iPhone 4, I wasn't impressed when Groupola's website wouldn't load this morning.
To be fair, ahead of the deal, Mark Pearson warned customers that they’d have to be very quick. He made it clear that there would only be a limited amount of handsets, but it was anyone's guess just how many (or how few).
He told the Guardian: “This is a closed deal; in that it’s only available to people that receive Groupola.com’s daily deal alerts. We have a limited number of handsets available, so my advice is to open the link the second the clock ticks over at 9.30am – by 9.31am; you may already have been too late.”
Failure to communicate
Regardless of the deal being real, it's the public's perception that matters the most here. It seems that Groupola and Mark Pearson really got it wrong this time.
Consumers' main gripe is that they had to pre-register their interest for the iPhone 4 by signing up to Groupola's daily alerts. This is the main problem. If Groupola had just held it as a regular daily deal (where you don't have to pre-register for Groupola's marketing emails), I'm fairly confident the backlash would have been less strong. Don't forget that Groupola claims to have received over five million hits this morning – so that's a lot of people signing up to Groupola's daily email alerts.
For Groupola, the question is whether this list of registered customers will be of any use. What can you do with a list of angry prospects? I doubt that many will be happy to continue receiving daily alerts after today, and will probably just mark Groupola's emails as "spam", binning the brand as junk forever.
Groupola have thus far tried to control the PR damage by issuing statements via Facebook and Twitter to try and reassure customers, but it looks like the damage has already been done. Groupola's biggest failure was its communication this morning. The website was down for a long time before Groupola made any statements on Twitter or Facebook.
Groupola's comms team was reactive rather than pro-active – a big PR no-no. You can Groupola's latest statement below.
Today's screw-up is set to do Groupola's reputation more damage than good. Sure, it got people talking about Groupola, but for the wrong reasons. Many potential Groupola customers have been turned into angry consumers.
We’ll try to get comments from Mark Pearson and Groupola later today. In the meantime, what's your reaction? Should Mark Pearson never have offered the deal, or was the hype worth it? Is all publicity good publicity? And, of course, what do you do with a database of unhappy consumers who pre-registered? Should he just get rid of it?
UPDATE - Groupola has issued a statement:
"Groupola is currently experiencing a number of website issues which means that it appears down to a high number of users. This is because of the sheer volume of people that are trying to access the website to take advantage of the iPhone4 deal. Between 9 and 9.30am this morning more than 5 million people have attempted to log on to the site, far more than was anticipated.
We can confirm that we had 200 handsets available, and these have now sold out.
61 comments.
John Bender 62 days ago.
Complete bullnonsense deal. I have unsubscribed from Groupola this morning, I hope people follow.
Emiliano 62 days ago.
I would like to see proof of winners of this iphone deal. This news appears to be misleading. I don't believe anyone actually was successful in purchasing the phone. I have been trying the website till now from 9:30am, and there is still no progress, so I don' know what the comment means when it says "...will continue to run until stocks run out." There are no stocks!!
Andrew 62 days ago.
All publicity is good publicity for sure BUT I'm an 'angry customer' now. In fact I'm not a fan at all. I've personally been involved in very high traffic/demand sites on big servers. These websites handled traffic perfectly. It would have been entirely possible to keep the site up this morning and Mark Pearson could've easily predicted this surge for the iPhone4 offer.
Andrew 62 days ago.
From my perspective its been a bad move overall and I will be telling people to not bother from now on. If anyone asks me about Balls-up-ola I will tell them to steer well clear. Well done Mark! You may have gained some publicity and more gullible users.. but you've also given yourself a bad rep (be it temp or long term) You could have pulled off a successful campaign by keeping your site online... and I know which situation I would rather be in this morning if I were you.
Follow Our Footsteps 62 days ago.
There once was a site called Groupola, who promised an iPhone tombola. But when the time came, their site turned to flame, and there's no longer any fans of Groupola!
Joe Dale 62 days ago.
I can see peoples point but the fact remains 200 people did get an iPhone 4 for £99. The people who are angry are the people who didn't get one, it's like getting angry at Camelot when you don't win the National Lottery because, in effect, thats what the deal was...A lottery. You got through to the site, or you didn't. I knew as soon as 9:30 came the site would probably die, but some people got through and got their phone.
Tony 62 days ago.
How did you unsubscribe? The unsubscribe link in the email only takes me to a page that talks about spam, no unscrubscribe option at all.
mivkey 62 days ago.
This has been a sham, everyone should complain to ASA and they will complain that Groupla didn't have sufficient stocks or the infrastructure to meet the demand of such an offering.
Rob 62 days ago.
Brilliant marketing exercise, I saw this everywhere!
ex groupola customer 62 days ago.
hope you got a good pr firm mark - what a f^%king ridiculous promotion if the site could not handle the response. At least Groupola can laugh at the fact that myself and 5 million other fools were sat there clicking away for 20 minutes..
Emily 62 days ago.
I got to the payment page and then was unable to continue because their page did not load - so technically i managed to get one but because i couldn't proceed with my payment i lost out - i find this deeply unfair - i spent two hours trying to get one, and when i did, had the opportunity snatched away again - Groupola should have know their servers would not be able to take such a huge hit - would have been far better to do a lucky dip style competition - very disappointed!
Emiliano 62 days ago.
Just to ask Joe Dale, you say the fact remains that 200 odd people won the deal, how are you convinced that they did actually win?
Helena 62 days ago.
I believe that this sort of underhand technique to get new email addresses should be made illegal, or at least tightly regulated. I will not be using this service again.
stephanie 62 days ago.
What a joke Mycitydeal is so much better than groupola atleast you get the deals they email to you. Groupola should be ashamed of themselves if they only had 200 handsets they should of only sent out 200 emails! I will be unsubscribing from groupola I will no longer be a subscriber of theirs.
Andrew 62 days ago.
@Joe Dale - Um no Joe... Playing the lottery is a fair and transparent game. You can buy a ticket and watch as the numbers are selected at random. I've never felt angry at not winning he lottery.
Joerg 62 days ago.
It's a SCAM!!! They never had a loss deal stock of iphone 4's. Even Wayne Rooney shrecked better than this Prince Charming Mark Pearson from the Scamming Castle Groupola!!! I recommend: Stay away from this rubbish english company!!!
Tony 62 days ago.
@Joe Dale you have no proof of this, and, if as you say the site died at 9:30, then how could a single person have purchased the phone?
Andrew 62 days ago.
@Joe Dale What I am annoyed with is the apparent lack of preperation. Mark and crapola are pulling in £0000s of profit a day. They can afford a server and bandwidth that stands up to 5million hits easy. What people actually feel genuinely angry about is the fact that they sat in front of their PC/Laptop and were present with "Error page not found" or "Server did not respond"
Phill 62 days ago.
An absolute disgrace and these fraudsters need to be reported. They should put up their server logs for all to see so we can decide if it was 'traffic' or something else that 'turned off' the site. A total shambles.
Andrew 62 days ago.
Event ticket websites handle this kind of thing very well when selling V festival or Glastonbury tickets (for example) . Their websites don't do what Crapolas did today. I feel angry that I've wasted a morning. If I knew that would happen I wouldn't have actually bother refreshing the screen. I to advanced to the payment screen and then failed to get any further because the site failed to load the next screen.
Jon C 62 days ago.
Funny how the site showed 207 handsets sold and apparently they only had 200. Something clearly doesn't add up there.
Marcus 62 days ago.
Talking about lottery, I'm better off winning it with this site: http://www.beatlottery.co.uk/
Phill 62 days ago.
I'm going to chip in a bit more here. I recently needed to buy a quantity of iPhones for internal use in my company (200 of). Apple would not give a discount on the retail price of a 3GS *AT ALL* How the Hell did Groupola get a 80% discount on 200? I smell a doity raat.
Tony 62 days ago.
I imagine that their PR company (11fools or 9brownnosers, I don't remember the name) must be working overtime to try and put the lid on this, but, the internet is bigger than 8monkeys and groupola :)
Emma 62 days ago.
"It definitely wasn't a con" - how do you know?! "Some users have posted screenshots of the deal, proving that it was real." They could have been fake accounts & manufactured screenshots. In Groupola's Terms and Conditions: "5. We do not represent or guarantee the truthfulness, accuracy or reliability of any material contained on the Site." (from http://www.groupola.com/static/page/terms)
Emma 62 days ago.
"what do you do with a database of unhappy consumers who pre-registered?" You sell it to spammers. I've been getting a lot more Spam since signing up. Also, check out their "Privacy Policy": By providing information to this Site you expressly consent to such information being transferred or stored outside of the EEA... we cannot guarantee the security of it. Any transmission of personal data to the Site is at your own risk."
Jason Hesse 62 days ago.
Hi Emma, Groupola are putting me in touch with some of the lucky buyers â€$quot; I'll update my story soon. Cheers, Jason.
Adam 62 days ago.
@ Phill: Groupola were very unlikely to have, either. I expect it was a loss-leading excercise, to garner more email addresses and increase publicity. Regardless: EPIC FAIL!
Imran Maqbool 62 days ago.
The worst bit is that after 2 hours of hitting refresh and getting nowhere, the Groupola staff are deleting our comments from the on-site discussion board!! Too bad everyone's feeling's can't be contained about this anymore, poorly planned, poorly executed, poorly managed. Poor poor poor!!
jasper 62 days ago.
A JOKE! I have unsubscribed to Groupola & MyVoucherCodes.
Terri 62 days ago.
1. THEY HAVE BLOCKED ME ON FACEBOOK !! 2. Not sure if they have 200, 202 or 207 phones sold. 3. Fake (?) IDs on FB ... 4. Deleting posts with negative comments on FB 5. Go though to the page where I put down my credit card details.. then got kicked out. 5. "Excellent" marketing and IT system.
Jon 62 days ago.
I tried for an hour and got one of the phones. It's real. Whats wrong with groupola? They offered a deal and they cant help that it was really popular! They didnt force you to give them your email address.
mike 62 days ago.
Jason, i've already made a formal complaint to ASA and they will investigate Groupola, 10 Yatis PR&MKT company and Mark Pearson. Mark Pearson posed as one of winning buyers of the iphone on the fab page in the Facebook- when questioned by other FB users - his profile was deleted from the Groupola fan page minutes later. I denounced 10 Yatis and Mark Pearson in the Groupola's Facebook page and they blocked my comments. ASA is very good to investigate scam and fraud cases within days. Groupola needs to prove that they have 200 definite buyers.
Dakota 62 days ago.
All the people saying "con" are plain stupid. This was a marketing exercise, end of. Mark Pearson is a millionaire, he can certainly afford to buy a couple of hundred phones and sell them at a loss. I'm not an advocate of Mark's business ways, but at the end of the day, he's got 5 million more subscribers, most of whom will not unsubscribe, so regardless of this stunt, or negative press, he will make more millions from the new subscriber base over the next few months, years... Therefore, another successful PR stunt from Mark Pearson.
Dakota 62 days ago.
All the people saying "con" are plain stupid. This was a marketing exercise, end of. Mark Pearson is a millionaire, he can certainly afford to buy a couple of hundred phones and sell them at a loss. I'm not an advocate of Mark's business ways, but at the end of the day, he's got 5 million more subscribers, most of whom will not unsubscribe, so regardless of this stunt, or negative press, he will make more millions from the new subscriber base over the next few months, years... Therefore, another successful PR stunt from Mark Pearson.
Joe Dale 62 days ago.
My main point is that people who didn't get it are complaining, i didn't get one, the site was crashing. Yes they have made mistakes, but still, they are a company who offer other fantastic opportunities and offers. To say that you wont ever look at their site again because you didn't get an iPhone is pretty pathetic. If i find another good deal on there then i will use it. They didn't force anyone to subscribe to the e-mail, and it even said that you can unsubscribe after the event... Just get over it is my response, i didn't get one, and i have...
Brian 62 days ago.
New Groupola fanpage http://www.facebook.com/pages/1-Million-Against-Groupola/136404733046008?v=wall
Chris 62 days ago.
This was clearly a list building exercise where they wrote off the cost of the handsets in their Marketing Budget. So there were never going to be many. That was clear. The issue I think they will now have is that people will be less inclined to share deals and in turn reduce the viral effect, which group buying websites thrive on. Seemingly group buying sites have found it hard in the UK to get good PR coverage (Unlike Groupon in USA) so at least everyone knows who they are now. However, I personally think the messages deceptive nature has left them with egg on their face.
Tony 62 days ago.
Quote = Dakota "most of whom will not unsubscribe" Therin is the problem Dakota, you can't unsubscribe, that's plain wrong whichever way you look at it, unless of course you're the administrator of said email list :)
David Morgan 62 days ago.
There is a saying that "if it's too good to be true - it's too good to be true". Mark Pearson should have (!could still!) offered a $10 voucher each day - so that progressively you could accumulate vouchers. Then each day offered only 10 iphones. So if you bought day 1 you'd get it $10 off, and so on until on the 20'th day you would have $200 off the price but still with only 10 for sale. This way he would have had less demand - but more loyalty.
Terri 62 days ago.
Not sure if I can agree with Dakota. It was meant to be a good marketing technique but has certainly backfired because of the way how they delete negative comments and ban people on facebook. You maybe right about the un-subscribe part.. as people cannot un-subscribe. We cannot actually un-subscribe!
samantha 62 days ago.
were not getting angry because we didnt get one its the fact the site didnt work and the link they emailed didnt work, they when i finally did get throught to the site it showed 207 iphones sold when there was only 200 for sale how do you explain that, i took a picture of it in my camera. doesnt add up.
samantha 62 days ago.
well if they had 200 phones with a rrp of 499.99 and they sold they for 99.00 then surley some1's making a loss somewhere????
Kevin 62 days ago.
Groupola are trying to get my business to partnership with them - teddybearfriends.co.uk - but if this is the reaction to one of their deals I think I'll steer clear. Normally a deal is done through a company so was it actually Groupola who are delivering these iphones direct?
Matt 62 days ago.
I tried from 9.30am through to the point it got sold out and twice I got through to an order page (couldn't believe my luck!) only to find it would only half load with no option to proceed. Probably not a scam but handled badly... the worse thing is that they are deleting posts from their Facebook page and over populating their wall with fake messages from obvious fake accounts or employer's accounts. This just makes everyone angry and believe that they are in fact hiding something.
Mark 62 days ago.
If they only had 200 phones, why at one point did the site claim to have sold 212 and still had more to sell? Given this, it's not at all like complaining to Camelot for not winning the lottery (as a previous poster said), Camelot's draws are independently regulated. There was obviously a problem with this promotion.
groupola fellover 62 days ago.
Joe Dale - do you work for the company by any chance or the companies pr firm?
Terri 62 days ago.
They blocked all my comments on FB (including those which are no harm to the company) And certainly they have deleted all the posts related to this group. http://www.facebook.com/groupola.london?v=wall#!/pages/1-Million-Against-Groupola/136404733046008
Jamie Burnett 62 days ago.
They have deleted my negative comments from their page, they have flagged my account and facebook have banned me at are yet to reinstate me, I have been in touch over the phone for the past week with the web architect (as he call's himself) Farhan and I have several emails over the past week from him, and he said today they received somewhere in the region of 35,000 unique visitors. That was at 12.50 today in a conversation lasting half an hour. This whole escapade has been pure bullnonsense from the off and I sincerely hope some suitable punishment from the authorities is forthcoming.
Jamie Burnett 62 days ago.
The only person whose comments are left undeleted on their own comment wall on facebook are by a stooge acting as a member of the public who is clearly seen holding an iPhone in one of their PR shots in the run up to what he laughingly calls a lottery. If this were a lottery the police would be all over it.
Jamie Burnett 62 days ago.
Fake profiles, a dodgey link, a mass PR campaign including a write up on the Guardian website (back hander anyone) leading to a site that crashed "unexpectedly" and a "first come first served" policy in tatters, the systematic deletion, banning and libel of those with grievances on their message board and all to generate and sell off an email address list to spammers.
Jamie Burnett 62 days ago.
I might just take them up on their kind offer of an internship to learn more from these guys. Capitalism at it's very finest, I applaud you. P.s Farhan said they might well run another campaign since it was sooooo successful, LMAO
Pinksnowdrops 62 days ago.
Easy to unsubscribe if you just go to the main website and click on the easy to see" unsubscribe link. However, shafted comes into mind re the iphone deal...
Terri 62 days ago.
Thanks to a member in the 1-million against group. This is how you can un subscribe to their web site: http://www.groupola.com/mailinglist/unsubscribe/email/0/0/email/ At the very end of the URL, you need to paste just your e-mail address and nothing else, i.e. then hit enter again http://www.groupola.com/mailinglist/unsubscribe/email/0/0/email/I<i>shouldn't havewastedmytime@abc.com</i>
Charmed2day 61 days ago.
So annoyed with them, i finally managed to get on the site, select the iphone, tick the paypal box........then nothing the "next" button was a dead link so wouldn't do anything....to actually have the phone in my basket ready to buy and not able to go any further was awful, all due to BAD MANAGEMENT!!!
Jane 60 days ago.
It doesn't supprise me one bit, you only have to do a quick search on google search for the owners name to find loads of information about how he scams the public, look at this latest one on his industy forum http://www.affiliates4u.com/forums/affiliate-marketing-lounge/155747-myvouchercodes-co-uk-spawning-lot-windows-dropping-lot-cookies.html http://www.affiliates4u.com/forums/affiliate-marketing-lounge/68920-mark-pearson-myvouchercodes-please-stop.html There was never an iphone it's just another lie, only this time it has not gone un noticed Jane
Wow 58 days ago.
Wow!? So many sore losers - that's my initial impression. And what this tells is just that - most regular cuistomers seems to turn to sore losers when they don't get it - that's the proof from reading so MANY comments here. And I think this has been the most commented post on Real Business' website for a long time. They probably found this while googling for Groupola - so only proves the point - need to complain due to THEMSLEVES being unable to get one.
Wow 58 days ago.
To continue my comment... In that respect it was a successful PR - you can't please everybody, you got 200+ very loyal followers now and some more interested people and created a bit of a following for sure. Then again in this modern time having that unstable website you have done a big reputational damage. Balancing out the two - you probably left more people angry so overall I would say you damaged the business.
SAMANTHA 58 days ago.
THEY HAVEN'T GOT 200 LOYAL CUSTOMERS BECAUSE THEY DIDNT HAVE THE PHONES IN THE FIRST PLEASE, HENCE WHY NOBODY HAS STATED THEY MANAGED TO GOT ONE AND THE ONLY PERSON SAY HE DID WAS EITHER DELEATED OR ITS STAFF MEMBERS WHICH WORK FOR GROUPOLA!!!
Pete 28 days ago.
You might like this article where all the comments from people who apparently got the phone deal are exposed at employee's of Groupola http://www.bitterwallet.com/staff-pose-as-punters-to-praise-the-groupola-debacle/31697 This is the worst mistake you could ever make and they should not be shut down for fraud. His voucher website is bad enough with all the invalid codes or listing retailers with no codes at all for SEO purposes. Dilutes Google results to a poor standard.
Dave 28 days ago.
Seems he uses underhand tactics on MyVoucherCodes to from what you see in Google. Also has some sort of cloaking script working on there, where any thing you type in brings up results and generates content on his site http://www.myvouchercodes.co.uk/similar/Mark+Pearson+Admits+Groupola+Iphone+Fraud+And+Should+Be+Shut+Down