Groupon must be feeling the strain. Today, the deals provider fell short of its Wall Street’s top-line estimate, and it’s facing rumors that its sales force, the backbone of the company, are fleeing in droves.
The Wall Street Journal reported today that the competitors are poaching the sales team at Groupon, and that reasons for the turnover include a lack of opportunity for promotions, and a struggle to keep up with increasing demands to add new business to the pipeline. By far the biggest challenge is that daily deals business is flooded with rivals in both North America and Europe, which has made it difficult for Groupon’s sales executives to meet commission goals.
Groupon may be the largest deal-a-day site, but it faces strong competition from Living Social and Gilt Groupe.
For all these daily deals sites, it’s become an increasingly tough sell. Many merchants won’t touch flash deals as they believe their loyal customers would have paid full price anyway. A Forrester study demonstrated that daily deals fanatics rarely turn into repeat customers.
Although most of the sales team doesn’t hold equity in the company, it may be demoralizing for them to hear reports of plummeting stock. The company was hit particularly hard in March, when it released its revised its fourth quarter earnings.