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07 Jul, Tuesday
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A Love Almost Lost: GroopDealz learned to bring its customers back—and keep them

Customers were definitely not happy. In fact, they were so unhappy that they started turning away. The loyal national following South Jordan, Utah-based GroopDealz had built over the past five years felt betrayed, and they were ready to find someone new.

But the angering gesture had been meant as a good thing, a strategic rebrand from GroopDealz.com to EleventhAvenue.com. It had been carefully crafted to delight customers—to provide a more upscale online boutique feel—while featuring the same great products, sellers and deals they had come to love.

However, what was implemented to bring in even more business did the exact opposite. Customers were leaving, sales were dropping—this was rapidly becoming an all-out corporate branding and marketing debacle. Just before its customers signed the divorce papers, the company’s leadership scrambled to woo them back. Six weeks after the launch of its new brand, GroopDealz reversed course and brought back the site everyone had first fallen for.

Best-laid plans

Harrison Mitchell, GroopDealz president, explains the original reason for the rebrand by starting with the company’s history. It was founded in 2010 as a local competitor to Groupon, focused primarily on Utah restaurants—thus the name, GroopDealz.

When an artisan asked to sell a handmade headband on the site, they thought they’d give it a try. “It went crazy,” says Mitchell. “We had customers from all over the nation purchase this headband, so it gave us the idea to switch gears and move away from the restaurant model and focus on a deals model for boutiques and handmade sellers.”

By 2015, the company had over one million customers who returned time and again for unique clothing, jewelry, décor and more at a great price. To better reflect its boutique offerings, Mitchell says the executive team thought customers would welcome the transition to a more boutique-like brand.

“We had experienced crazy growth, and now we wanted to create kind of a social e-commerce experience, to build a transparent platform that would engage the boutiques with the customers, create this immersive community,” explains Mitchell.

He says the company launched its hard re-direct in March 2015. “When customers went to type in GroopDealz, they went to Eleventh Avenue,” says Mitchell. “We didn’t lead into it; we went all in.”

But customers hated the move—business was hemorrhaging, and the company was forced to take a hard look at where it went wrong. It reached out on social media and email, sending surveys and contacting its VIP customers to understand why customers were so turned off.

Learning curve

The responses were consistent. Mitchell says, “We didn’t realize how strong of a following of a brand GroopDealz had. We found out after tons of feedback, talking to customers, they really loved the GroopDealz brand. They associated a good product with a good price. We found the [Eleventh Avenue] branding and the name was associated with more of a high-end customer. After six weeks, we brought it back [to GroopDealz]. Customers were super happy.”

Mitchell recounts the lessons learned by starting with the most important: Ask your customers what they want, don’t tell them. It didn’t matter that the executive team thought the rebrand was a great idea, or even that a top marketing firm agreed—customers weren’t happy, so no one was happy.

Mitchell also points out they discovered the importance of using analytics to better understand customers’ nuances and patterns.

“We had this business that was growing, but we weren’t looking at data like we should have. Once the rebrand happened, we really had to dive into deep analytics of the company and solve these complex problems, understand what the customer likes and doesn’t like. I have probably learned more in the last nine months than the previous five years,” says Mitchell.

He says the company has seen how critical it is to shield itself against loss. “One big thing we learned was to make sure we protect the downside: ‘What things could happen? What do we have in place to minimize any problems or issues?’”

Rekindling the love

Fortunately for GroopDealz, the company mitigated the impact of those downsides by responding quickly to its customers. “The second we brought GroopDealz back, it was like flipping a switch. We sent out an email to all the subscribers letting them know GroopDealz is back, did a big social media campaign push on it. They came back. They were happy,” says Mitchell.

“It was kind of a crazy marketing test, where we have the exact same products, the exact same prices [on both sites]. But they didn’t like it. Because you associate Eleventh Avenue with New York, they thought, ‘Their prices are going to be higher, I don’t want to shop here anymore.’ But it’s the same sellers on both sites, just presented differently.”

Mitchell adds, “What’s funny is we actually still have about 40,000 customers shopping on Eleventh Avenue, but the rest of the million-plus are back on GroopDealz. The ones on Eleventh Avenue love it, and we’ve got plans down the road for it. We think it will be a great opportunity down the road.”

In the end Mitchell says it’s important to learn from mistakes and move on. “We invested a ton; we had missed sales opportunities during that time, so it was a very expensive lesson learned,” he says.

To its credit, the multimillion-dollar online marketplace has learned that lesson and continues to see growth—and customers are once again satisfied with the relationship.