Megan McArdle:

As far as I can tell, small businesses viewed Groupons largely as the former: you give away your product near cost, and gain new customers from Groupon’s huge mailing list.

Anecdotally, Groupon’s salespeople in fact encouraged businesses to give their product away at a loss in order to attract new consumers. By lowering the cost of trying your restaurant or salon, the theory ran, you could win new business that you wouldn’t otherwise have gotten.

The problem is that for consumers, it seems mostly to have been about price discrimination; people used Groupons to buy something that they wouldn’t buy at full price. So while your Groupon deal brought in a huge stampede of new customers, those customers were either too cheap, or too poor to spend a bunch of money at your business. Restaurants, who were supposed to be one of the core businesses for daily deals, complained that Groupon customers were disproportionately poor tippers who took up tables while carefully not spending any more than the face value of the Groupon–no drinks, no dessert. Then they never came back.

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The Obama campaign’s crack marketing staff routinely failed to predict which e-mail subject line would work best:

Writers, analysts, and managers routinely bet on which lines would perform best and worst. “We were so bad at predicting what would win that it only reinforced the need to constantly keep testing,” says Showalter. “Every time something really ugly won, it would shock me: giant-size fonts for links, plain-text links vs. pretty ‘Donate’ buttons. Eventually we got to thinking, ‘How could we make things even less attractive?’ That’s how we arrived at the ugly yellow highlighting on the sections we wanted to draw people’s eye to.”

Their success was in their ability to find out what works, not their ability to get it right the first time.

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L. Gordon Crovitz on what “big data” has wrought: “Voters need to develop buyer-beware habits. The era of politicians saying the same thing to all voters is over. Campaigns aim to tell voters exactly what each wants to hear: data-driven pandering.”

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There’s a powerful force keeping your supporters from giving you money online: friction.

Tim Kachuriak, Dan Gillett, and I will tell you how to identify friction and how to limit its effects on April 8 at the Association of Fundraising Professionals 2013 International Conference in San Diego.

Here’s the event description:

Friction can be described as anything that causes psychological resistance to a given element on a web page. And if you took a good look at your online donation page, you’ll find it is riddled with it. This entertaining workshop will help you to identify the donation-killing friction on your web site and implement strategies to limit it.

How has friction limited your online fundraising?

It may work for a campaign, but it’s not the way to build a long-term financial relationship with someone: “Using digital analytics, Team Obama was likewise able to squeeze every last cent out of supporters in ways unimaginable only four years ago.”

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