Chapter Four

The Price of Progress

How faceless commerce leads to a focus on discounts

In 2011, held the distinction of being the fastest-growing internet company in history. In 2012, it held another distinction—the fastest-falling tech stock since the dot-com bubble. The rise and fall of Groupon’s daily e-mails of discounted deals could have been foreseen by anyone familiar with the warmth and competence model. Offering deep discounts does not win you hoards of new, loyal customers, as Groupon claimed, any more than you can buy someone’s love. Groupon and its many imitators are to customer loyalty what singles bars are to weddings: sometimes a connection at one may lead to the other, but not very often.

The initial allure of Groupon ...

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