I try to use this blog to talk a bit about things going on in the business world and why HR people should care about them. One thing I've talked about recently was the emergence of Groupon, the digital coupon people, and how they've used a competitive advantage based on writing better offers to generate buzz and results that recently generated a 6 billion dollar offer from Google to buy them. (Yes, that's six billion.)
One of the effective comments I received went like this:
"Kris, interesting take, however, I think your argument may put too much basis on the potential value of written job postings. I agree it's a great opportunity to differentiate yourself, but I'm not convinced the effort:return ratio will be there. But that's also dependent on the effectiveness of other channels, I know. Here's an interesting article on Groupon http://www.pehub.com/91225/depressing-thoughts-about-groupon%E2%80%99s-model/ that's worth keeping in mind.
The lesson I take away is differentiate now, before everyone is doing their version of it, and the "noise" again becomes deafening for candidates."
Jim was fair and balanced in his comment and while he questions the sustainability of the competitive advantage that Groupon has, he recognizes the need to differentiate in what you're doing in recruiting or HR. The problem with the comment is that the article he cites gives the average HR pro a rationalization for doing nothing to improve. From the PE Hub article referenced above on Groupon:
"A great deal has been written about Groupon’s rejection of a supposed $6 billion offer from Google. Most of the reports breathlessly describe the explosive revenue and customer growth the company has achieved in two short years and what a breakthrough the model represents. With over 40 million email subscribers, Groupon’s success is based on consumers responding to their daily deal emails, and sourcing high-quality offers that compel readers to respond. The story CEO and founder Andrew Mason told in his interview with Charlie Rose last week was that when they offered helicopter flying lessons in one of their daily email blasts, they sold 2,500 in one day. This compares to a business that had acquired only 5,000 customers in its 25 year history.
But haven’t we seen this movie before in the world of direct marketing? History has shown nearly every major new direct marketing paradigm sees impressive initial response rates, but depressing response rates over time. For example, when display advertising was innovative in the late-1990s (imagine websites without ads?), publishers saw click through rates in the 1-2% range, allowing advertisers to be charged a high cost per thousand impression (CPM) in the range of $35-40. Today, iMarketer and MediaMind report that display advertising click-through rates are 0.10 - 0.20% and CPMs of $2-3 – less than one tenth what they were ten years ago. Email has shown a similar sharp decline over time. Average click through rates for the early years of email campaigns in the 1990s were as high as 30-40 percent. Today, they range from three to five percent, again, a 10x drop.
Groupon conversion rates, supposedly, are now in the three to four percent range. What will those same response rates to the same consumers look like in five years? Will daily deals follow a fundamentally different model than every other new direct marketing medium? The benefit of being only two years old is that you don’t have a lot of vintage data to analyze. "
The good news, I suppose, is that any recruiting or HR pro who just took the time to read the data on Groupon from PE Hub above is exactly the type of professional who would understand Jim's point - the differentiation you're attempting may not last, but you still need to find a way to differentiate your HR or recruiting practice. And they'd try to do it...
Still, I worry that the average types would read the data on click through rates above and say, "See - any positive impact you get from thinking differently about job posting/descriptions won't last. So, I'm not going to bother even thinking about it..."
And those are the people in the profession I worry about most. Which, in an interesting turn of events and logic, is exactly the reason any differentiation you achieve in HR or recruiting is likely to last longer than you expect...