WHAT WE LEARNED THIS WEEK: If you burn customers, they won’t forget it

SmartCompany investigated the disappearance of a group buying site this week, after customers and merchants associated with SoSharp.com.au contacted us about the company’s demise.

After offering a refund to hundreds of customers in July for a faulty KitchenAid mixer, the company suddenly went offline in August leaving hundreds of customers and merchants hanging.

The full story is available here. The company says it’s been acquired, but at this stage it hasn’t been revealed by whom.

This isn’t a lesson against the group buying industry, but rather good customer service. SoSharp just went offline without telling anyone what happened. In the online age, when information spreads instantly, that simply can’t happen. If it continues to trade the company will have a controversy floating over its head.

Keeping your customers in the know is essential. If you disappoint them in a big way, they won’t forget it.

Group buying requires a strategy

But there have been some other worrying signs in the group buying industry this week, with new figures from Telsyte showing the industry is actually declining. This year it’s set to make $600 million.

It’s no surprise. The industry had a massive run during its beginning and is beginning to cool down. But it also serves as a warning for businesses in this space.

There are some clear trends here. Consumers want products, not just services. And while many also want national deals, they’re keen for localised bargains as well.

Merchants involved in the group buying scene can definitely get some good deals. But they need to target them correctly and not assume that one size will fit every customer.

Focusing on global expansion is still important

Over the past couple of years, entrepreneurs who have invested in Australian tech companies all share a common view – they think the companies in which they have invested are able to grow to a global scale.

Indeed, many of the companies that have succeeded operate on a global plan. 99Designs, Atlassian and OzForex are just a few – and those investments all came from Accel Partners.

The investment from Aura Capital into cash-back start-up StartHere.com.au this week highlights this message yet again. Aura principle Calvin Ng told SmartCompany the investment comes partly because the site has global ambitions and can get there with a push.

Australia’s isolation means entrepreneurs have to focus on a global audience. Tech businesses shouldn’t downplay their expectations. The rest of the world is watching, and securing investment doesn’t mean you need to stay in Los Angeles.

Focus on the world – the rest will fall into place.

New telecommunications consumer code has some business caveats

The new telecommunications consumer code began last weekend, and among other regulations it brings a suite of new rules that will benefit both consumers and businesses.

But there’s something businesses need to keep in mind when buying telco packages under the new rules.

The new code mandates that telcos need to tell customers when they’re breaching their usage limits for both voice and data. That means when you reach certain thresholds, such as 50%, or 85%, or 90%, you’ll be given messages telling you so you won’t go over your limits by accident.

But customers on business packages won’t get these limits. That means if you’re using a business deal, you’ll still need to pay attention to your usage.


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