Does Your Brand Determine Your Customers?

This article on LivingSocial’s customer base got me thinking about how positioning your brand when you start a company can affect how you end up growing and the user types you attract.

While I do work at LivingSocial and I do like to slog Groupon, I think this article points out a curious result of branding between the two companies. Groupon is all about the deal. The best cost is the lowest cost. Limited time availability! Share it with your friends to make sure it “tips”! LivingSocial has positioned itself more as a higher-end brand, with mixing in its escapes packages, etc. Just look at the design of the sites as well. Groupon is all green and color heavy. LivingSocial is image heavy. And I think that the brand the companies have put forth have attracted a certain demographic:

Nielsen’s survey data, gathered from 200,000 Internet users, shows that people who use LivingSocial are 49 percent more likely than the average American online to make at least $150,000 a year, compared to 30 percent of Groupon users. LivingSocial customers are also younger (51 percent of them are between 35 and 64, while 57 percent of Groupon’s customers fall in that range), and they’re better educated (46 percent of its users had attended or graduated college or received other degrees, compared with Groupon at 39 percent).

While LivingSocial is number 2 in the daily deals space, I think that they’re set up for a much better run. They can do higher end deals, and therefore gross more revenue. There’s a lot of co-brands to a higher end demographic that simply don’t work on a carnival barker approach.

It reminds me of Apple’s positioning after they started pushing the iPod and other consumer electronics. When you mix this with LivingSocial’s fanatical customer support, especially evident on Twitter, it starts to point to a more successful run.

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