So you want to start a daily deal or coupon program but keep hearing all the negative press about industry giants like Groupon and Living Social? We power the daily deal and coupon program software behind thousands of websites all over the U.S. and Canada and while we hear stories of struggle we also receive stories of great success.
Some of our clients are already on track to make 30K a month this year, well over their gross revenue from last year. Moreover, we wanted to share these stories of success and stop all the negativity surrounding the daily deal and coupon industry. Below are several case studies from Deal Current Network clients who took small steps in their deal and coupon program to experience big rewards.
WLNS TV 6 Lansing, aka “6 Savings” proved that bundling online coupons with additional low cost advertising is a win/win for both the client and the program. The innovative idea uses coupons as a lead in to sell additional TV spots. Customers who have never advertised on TV are given the below options to get a taste of how it can change their business.
$99 per/mo coupon only
$275 per/mo coupon + 20K online impressions/ads on WLNS.com
$475 per/mo coupon + 20K online impressions/ads & 3 TV spots (most popular option)
Spealo,a standalone, independent local commerce site is run by an entrepreneur who started from scratch in Chicago. She secured 44 coupons in just two months through unique promotional pricing. Local deals are offered, but as a follow-up to a successful coupon.
$50 per/mo for 1-3 locations
$75 per/mo for 4-10 locations
$100 per/mo for 11 or more locations
$10 per/mo for an independent distributor ( Mary Kay, Tupperware, Tastefully Simple, etc.)
$25 per/mo for an in home businesses–no storefront (1-3 employees, possibly a seamstress, house cleaning service)
Initial rate: free for the 1st month (client puts in their own credit card for first month then switches payment to advertiser).
“Giving one or two months for free is working GREAT! It only takes me 5-10 minutes to do my sales pitch and fill out the form! I walk in and tell them who I am and tell them I’d like to do some free adverting for them. They are all ears! Then I go back with the Coupon Contract prior to the free trial ending so they renew their advertising coupon campaign. It’s been working GREAT!” - Heather H, Spealo.com
Deal Current Network was featured by San Diego Daily Transcript this week.
Deal Current Network, a private-label daily-deal software company, is giving away valuable tech tips through a campaign called Take Back Local.
Its executives are teaching local owners of businesses ranging from tour companies to yoga studios how to improve their online marketing.
San Diego-based Deal Current’s e-commerce platform for daily deals, gift certificates and coupon marketing is used by about 100 media companies nationwide, including NBC and the Pittsburgh Post-Gazette.
“Anyone who needs a deal or coupon platform,” said Jimmy Hendricks, chief executive officer and co-founder of Deal Current.
The campaign was born when Deal Current’s media clients voiced the need to educate its advertisers — small businesses such as restaurants, spas and retail stores — about online best practices.
The company’s survey last fall of 17,000 merchants revealed that many businesses are clueless when it comes to the basics of online marketing.
As a result, Deal Current decided to hold a string of seminars targeting business owners and marketing directors that have run a daily deal or coupon in the San Diego market.
“In the last three years Groupon and LivingSocial abused a lot of the merchants,” Hendricks said. “If you give people a lot of ways to run their business effectively, they will have more money to spend on things like advertising.”
In addition to learning about simple website design, seminar attendees learn how to land their website on the first page of Google, rather than paying an SEO company to do the same.
Businesses also get a rundown on the San Diego daily deal and coupon space, how to make coupons work for their business, and performance-based coupons versus flat-rate coupons.
Companies also get tips on trading services with media groups for advertising.
Prime-trade candidates include lower-margin consumer businesses, such as a boutique that can trade gift certificates in exchange for TV ads.
“Then (you) let the media company sell those to make money. We want to educate business owners that that is an option,” Hendricks said.
The first seminar, in February, had 65 attendees at One America Plaza. The landlord, The Irvine Co., offered free space.
Deal Current will move its headquarters in June from Little Italy to the nearby skyscraper at 600 W. Broadway, doubling its square footage.
Two more seminars will be held in March and April, and depending on demand, they could continue monthly.
“We feel it’s a way for us to build a relationship with people without selling them something,” he said.
The hope is that pleased seminar attendees will refer other businesses back to Deal Current and their media clients.
The campaign will be developed in San Diego for six months and then piloted in such markets as Pittsburgh or Miami, where Deal Current has clients.
“The goal is to put together a local playbook and give it to our clients for them to use in other markets,” he said.
The company’s team of 13 is looking for local sales reps to work with merchants and plans to hire software engineers in the summer.
The campaign initially launched with an “anti-Living Social and Groupon” message, but that was toned down to avoid legal fallout.
Despite Deal Current’s head-to-head competition with the daily coupon giants, the company isn’t on their acquisition list.
“They couldn’t buy us because we are technically enabling their competitors,” Hendricks said.
His company raised $700,000 last year from San Diego members of the Tech Coast Angels and Scottsdale, Ariz.-based Canal Partners, and expects to break into profitability in the next four months.
Other companies haven’t been as lucky in the crowded daily deal software segment. A year ago, Deal Current had about 10 competitors, but those numbers are dwindling.
In January, Group Commerce laid off 28 percent of its staff, according to several reports. Carlsbad-based Analog Analytics was bought by Barclays Group PLC last year and hasn’t been as heavy in the space since.
Deal Current’s remaining top competitor that also offers an e-commerce product is St. Louis-based Second Street Media Solutions.
About a dozen TV, radio and newspaper media clients are signing up each month for Deal Current, Hendricks said.
The company is considering a pilot program next quarter with restaurant rewards program Mogl.
“You can sign up for Mogl as part of buying a deal through one of our media companies,” he said. “We have a great offers product and Mogl has a great loyalty product.”
One of the challenges Daily Current faces in signing clients is the fact that online revenues sometimes aren’t a large part of the bottom line.
“If a TV station is making $50 million in a San Diego market, they are only doing half a million or $1 million in online,” he said. “So the roadblock we have is getting them to invest in the future.”
Deal Current’s selling point is they have a fully hosted service that makes it easy for the media companies.
“They are not technology companies — they don’t want to invest in support,” he said. “They want to sell advertising and products that are useful, that fit their audience.”
The companies investing online are sticking around, he said, citing The New York Times’ strong pay wall revenues.
“It showed there is value in content. Some people act like media is going to die tomorrow – it’s just going to slowly transition online,” he said.
See What Attendees Had to Say
Sample Seminar Content:
Have you ever noticed when you visit a big site like Zappo’s or another e-commerce site, that you start seeing their ads on blogs, YouTube, and media sites right after. That is called Remarketing.
Remarketing is the process of showing ads only to people who visited your site recently or during a set time period like the last 90 days. This process increases your brand exposure, reminds the customer of your website, and increases sales.
The great thing is it is very cost effective and makes your program seem much larger than it may be.
Advertisers and customers will both think: “Gosh, this company is everywhere. I see it more than Groupon.”
So here is some information and how to get started.
A Short Video Overview of Remarketing
Here is a short 50 second video overview of Remarketing by our CEO Jimmy Hendricks, from a recent advertiser marketing seminar in San Diego. We are piloting short 90 min training seminars to teach small businesses about online marketing, offers, and coupons.
Why Should You Use Remarketing?
Remarketing allows your business to look bigger than you really are. Say you talk to an advertiser, and then they visit your website, and start seeing your ads on other websites—this will remind them of you and make you seem more powerful than you really are. The same thought happens with consumers.
Also, Remarketing is very cost effective. We ran banner ads in San Diego for two weeks, targeting an audience of 25,000 people, and the cost was under $200.
Examples of Remarketing Ads
The great thing about Remarketing is your ads will show up on local websites (when those sites have ad space left) for a fraction of the cost.
Here is a perfect example of our ads on the San Diego Union Tribune. One day we had all 3 spots on a page load and our total cost from that website was about $15.
How to Get Started
Step 1: Watch the Google Remarketing video. http://www.google.com/ads/innovations/remarketing.html or on the video to the right.
Step 2: Create a Google AdWords account
Step 3: Create an “Audience” within your Google AdWords account. The video explains how to do this.
Step 4: Create 4 common banner sizes for your program. You can start with less, but these are the four most popular sizes (File max size is 50kb and sizes need to be exact):
Step 5: Google will need to approve the ads which typically takes 3 business days. You can email them on the third day if not approved and this speeds up the process.
Step 6: If you have more questions check out this cheatsheet http://www.wordstream.com/blog/ws/2012/12/19/google-adwords-remarketing-cheatsheet
Yesterday the founders of Deal Current Network, Jimmy Hendricks and Patrick Dillon, spent 90-minutes teaching San Diego businesses owners how to market their business online. In attendance were media representatives from NBC 7 San Diego, San Diego Magazine, Fox 5 San Diego, Get1Free Magazine, Pacific Magazine, and San Diego Family Magazine. Small businesses owners like Laura from Pacific Nature Tours, Connie from Click Through Coupons, Tomio from AVI Technologies, Bonnie from Sanctuate, Michael from Infinity Financial Services, and Anthony from Aserenity Skin and Body were able to network with media representatives as well as gain valuable information for their business.
Hendricks, talked for about 40-minutes on simple website design and key SEO techniques get your website on the first page of Google. He also discussed, which social media profiles are a must, and how to trade your services with media groups for advertising.
“I came in here thinking I know a lot and I probably learned about eight new things I didn’t know. I highly recommend it, it was very organized, amazing presentations—these guys know what they’re talking about.” – Connie, CEO of Click Through Coupons and Marketing Director at FIT Athletic Club
Dillon, wrapped up the seminar talking about the San Diego daily deal and coupon space, how to make coupons work for your business, and performance based coupons versus flat rate coupons.
“Our business does a lot of daily deal marketing and to see all the different opportunities available in San Diego was very beneficial.” Laura, Pacific Nature Tours
“I was very excited about the digital coupon section because one of the things I found the digital coupon does is it gives you incredible track-ability and flexibility. You can see where your clients are coming from and make adjustments to the coupons that are not effective for you, opposed to print and other types of media.” Anthony, Aserenity Skin and Body
Overall, the morning was a success for both Deal Current Network and San Diego business owners. Take Back Local was able to gain valuable feedback to make the next seminar on 3/29 an even bigger success.
“I highly recommend this seminar to anybody who is a business owner or marketing person. They talk about different strategies that I think are useful and things that are up and coming that you should be aware of.” Steve, NBC 7 San Diego
For more information watch us on San Diego CW6 below or visit TakeBackLocal.com
Yesterday, San Diego Living’s Lynda Martin interviewed Jimmy Hendricks, the CEO of Take Back Local and Deal Current Network. Organized by Deal Current Network, Take Back Local is a grassroots outreach program, teaching small business owners how to profit from online advertising. The business is hosting three free seminars at the One America Plaza from 9-11am on:
Co-Founder and CEO of Deal Current Network, Jimmy Hendricks will show attendees how to leverage loyalty programs, trade for advertising, and the San Diego Coupon Network for their business. Attendees will walk away with clear actions and tracking methods to take their business to the next level. The program is partnered with NBC7 San Diego, Get1Free, San Diego Magazine, San Diego 6 CW, and over a half dozen other publishers.
The last 12 months have been some of the most volatile times in the daily deals space. In 2010, Forbes hailed Groupon as the fastest growing company ever. Two years later, at a $3.6 billion valuation, it’s half the value of what Google was willing to pay for it before it went public. Now, some critics, Forbes included, are calling for Andrew Mason to be removed or step down as CEO.
Groupon’s struggles aren’t isolated. Living Social has struggled to attain profitability and in November slashed 400 jobs trying to do so. There’s even been a shakeout with the white label daily deal software providers, the vendors that help media and others develop the long tail of the deal industry. Two years ago, there were 15-20 providers, including most notably Analog Analytics, Deal Current Network, Deal Pigg, Group Commerce, Nimble Commerce, and Tippr, providing software to local TV, Radio, and Newspaper groups in the daily deal space. At the end of 2012, there were only a couple top providers operating profitably and gaining market share. The rest have closed down, stopped accepting new clients, or diverted resources to new projects.
However, merchants are still in search for a low-cost way to reward regular customers for their purchases. So what should publishers and merchants be focused on in 2013?
1. Marketing fewer deals with higher quality. Daily deals continue to work for some, but not all merchants. In one sample of a major TV deal program in San Diego, 43 percent of the total annual deal sales came from just 25 deals, or about one tenth of the total deals ran that year by that publisher. Deal programs should focus on working with the right type of merchants, not all merchants.
2. Picking the right loyalty program. Many companies are trying to figure out what’s next after an initial new customer is introduced to a local business. Older organizations in this space like Rewards Network/iDine, are seeing a new wave of competitors with some major venture backing. Companies like Belly, Mogl, andLevel Up are putting a heavier focus on making things fun and easy for consumers and simple for merchants to track. The trick that loyalty concepts will need to prove is that their programs bring in new incremental business, not just deal seekers, and are not just garnishing a percentage of revenue from existing customers.
3. Trading advertising for services and products. The daily deal industry started long before Groupon, but back in the 90’s and early 2000s it was a booming trade business. Merchants would trade their products and services for a no-cash required media trade. For example, Jim gives his local radio station fifty $100 gift cards in exchange for $5,000 in advertising credit on air. The radio station turns around and sells those gift cards at a discount and recoups the free air time given. It’s a win-win for everybody (merchant, radio station, and consumer who gets a great discount.) This brings more perceived value to the local merchant because Jim now gets an email blast and $5k in air time.
4. Competing with banks? How financial institutions affect the local offer market will be seen in 2013. Last June the daily deal white label Analog Analytics was purchased by Barclays Group, and JP Morgan Chase just announced the acquisition of Bloomspot. Other financial institutions are sure to follow. These organizations see this as a consumer benefit and won’t need to be profitable as a stand-alone business. Some banks, like Bank of America with their AmeriDeals program are starting to go after this market on their own.
5. Investing in digital coupons. Google Adwords and Facebook’s advertising platforms work great for the large and savvy merchant. Local merchants are still in search of an advertising outlet that costs nothing upfront and only costs money when customers take action. Coupons.com, Coupon Cabin, and Retail Me Not have proven that performance based digital coupons work at the national level and Emarketer reported that 92.5 million people redeemed a digital coupon in 2013. We expect local merchants will start searching and requesting a similar marketing channel in 2013 and beyond.