In this webinar, from the Msgme Industry Insights series, we unpack the daily deals business completely and reveal why ongoing, interactive engagement is the key to success.

1. Msgme
Industry*
Insights
*
Daily
Deals
And
Mobile
-­‐
Engagement
Explained
Kane
Russell,
VP
of
Marke,ng
Waterfall
Mobile
1

2. Waterfall
Mobile
and
the
Msgme
Pla:orm
Waterfall
Mobile Msgme
๏ Founded
August
2005 ๏ Free
trial:
www.msgme.com
๏ Offices
in
SFO
(HQ),
NYC
&
Aus,n ๏ API
suite:
developer.msgme.com
๏ Backed
by
Vista
Equity
Partners
๏ Custom
applica,on
development
๏ Cross-­‐channel
mobile
&
social
CRM
via
SMS,
๏ Short
code
provisioning,
cer,fica,on
MMS,
QR
Codes,
IVR,
Facebook
&
TwiXer &
audit
management
2

3. Objec>ves
๏ Daily
deals
-­‐
“hot”
or
“not?”
๏ Economics
-­‐
how
daily
deals
create
value
๏ Success
factors
-­‐
how
daily
deals
can
stay
“hot”
๏ Solu,on
-­‐
mobile
marke,ng
CRM
๏ Implementa,on
-­‐
mobile
and
daily
deals
๏ Key
takeaways
3

4. Daily
Deals
-­‐
“Hot”
All
Summer/Fall
2011
Headlines
4

5. Daily
Deals
-­‐
“Not”
All
Summer/Fall
2011
Headlines
5

6. What’s
Affec>ng
Revenue?
2010
-­‐
2011
Groupon
Revenue
Es>mates
$90
$89
$75
$81
$76
$60 $62
Millions
of
Dollars
$53 $55
$45
$46
$30
$31 $29
$26
$15 $19 $21
$14
$11
$0
Jan
‘10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10 1/11 Feb
‘11
Month/Year
Source:
Techcrunch
6

7. Is
Deal
Fa>gue
A
Factor?
Daily
Deals
Consumer
Survey
Data
(n=943)
Subscribed
to
daily
deals 86%
Subscribed
to
Groupon
&
Living
Social 72%
Only
buy
from
Groupon 41%
Subscribed
to
at
least
3
providers 36%
Been
subscribed
more
than
1
year 20%
Now
opening
fewer
or
none
of
offers 74%
Will
buy
fewer
deals
than
have
in
past 68%
Source:
Local
Offer
Network
EsAmates
7

8. Daily
Deals
Industry
Revenue
Projec>ons
US
Group
Buying/Daily
Deals
Market
INDUSTRY
REVENUE
(GROSS)
in
billions
of
dollars
$2.67
$1.12
2010 2011
Source:
Local
Offer
Network
EsAmates
8

9. Daily
Deals
Industry
Offers
Growth
US
Group
Buying/Daily
Deals
Market
TOTAL
OFFERS
PUBLISHED
40,000
39,993
30,000
20,000 22,163
19,676
10,000 14,462
6,895
2010
Q1 2010
Q2 2010
Q3 2010
Q4 2011
Q1
(E)
Source:
Local
Offer
Network
EsAmates
9

10. Economics
of
Daily
Deals
Daily
Deals
Service
Providers
Before
During
Ajer
Deal
Day
Consumers
Merchants
10

11. Before
Deal
Day
๏ Daily
deal
value:
amount
consumer
would
pay
normally
๏ Daily
deal
price:
amount
consumer
pays
for
daily
deal
๏ Daily
deals
sold:
number
of
daily
deals
purchased
by
consumers
๏ Revenue
split:
agreed
upon
provider
and
merchant
revenue
share
๏ Payment
terms:
,me
un,l
provider
pays
merchant
๏ Average
>cket:
the
normal
purchase
amount
at
merchant
establishment
11

12. Deal
Day
๏ Merchant
revenue:
amount
of
revenue
generated
for
merchant
๏ Provider
revenue:
amount
of
revenue
generated
for
provider
๏ Redemp>on
rate:
percent
of
customers
that
purchase
and
use
daily
deal
๏ New
customers
%:
percentage
of
new
customers
for
merchant
from
deal
๏ Credit
card
processing:
charge
by
credit
card
companies
for
transac,ons
๏ COGS:
cost
to
the
merchant
of
good
sold
๏ Other
merchant
costs:
cost
to
the
merchant
of
doing
business
๏ Consumer
spend:
consumers
may
spend
more/less
than
daily
deal
value
12

13. Ajer
Deal
Day
๏ “Yelp”
effect:
percep,on
of
merchant
aler
daily
deal
promo,on
๏ Repeat
customers:
number
of
consumers
who
return
to
merchant
๏ “Deal
hunter”
effect:
number
of
consumers
willing
to
buy
at
full
price
13

14. An
Example
Daily
Deal
Promo>on
According
to
terms
from
Techcrunch
“Stop
The
Hate,”
hop://tcrn.ch/nIW:Q:
14

15. So
How
Can
This
Work
For
A
Merchant?
Unfortunately,
not
as
simple
as
“merchants
should
nego>ate
beoer”:
15

16. Daily
Deals
Industry
Factors
Low
margin
businesses
face
much
greater
risks
running
a
daily
deal:
16

17. Daily
Deals
Execu>on
Factors
Daily
deals
can
be
profitable
if
they
aoract
new
and
repeat
business:
17

18. Purng
It
All
Together
Higher
margin
business
+
nego>ate
terms
+
execute
well:
18

19. Daily
Deals
Success
Factors
๏ For
Merchants
-­‐ Nego,ate
beXer
terms
with
deal
providers
-­‐ Make
sure
daily
deals
is
right
for
your
business
๏ For
Merchants
&
Providers
-­‐ AXract
new
customers
with
daily
deals
-­‐ Make
sure
new
customers
return
-­‐ Recruit
these
new
customers
as
brand
ambassadors
19

20. Mobile
Marke>ng
CRM
1)
Build
a
mobile
subscriber
database
2)
Mone>ze
database
through
interac>ve
mobile
communica>on
campaigns
IVR
20

21. Time
To
Invest
In
Mobile
Is
Now
Which
describes
your
mobile
strategy?
Source:
Forrester
21

22. Time
To
Invest
In
Mobile
Is
Now
What
kind
of
investment
in
mobile
do
you
foresee
in
2011?
Source:
Forrester
22

23. Time
To
Invest
In
Mobile
Is
Now
What
do
you
feel
are
top
uses
for
mobile?
Source:
Forrester
23

24. Mobile
and
Daily
Deals
๏ ABract
new
customers
with
daily
deals
Vet
daily
deal
sign
ups
against
ac>ve
subscriber
list
No>fy
current
customers
of
alterna>ve
promo>ons
๏ Make
sure
new
customers
return
Capture
mobile
subscribers
upon
deal
sign
up
Capture
mobile
subscribers
upon
purchase
๏ Recruit
these
new
customers
as
brand
ambassadors
Run
“bring
a
friend”
campaigns
for
new
subscribers
Drive
online
brand
equity
via
interac>ve
campaigns
24

25. Case
Study:
Gelato
Spot
Success
to
date:
๏ Had
customers
opt-­‐in
for
mobile
subscriber
list
when
they
used
daily
deal
vouchers
๏ 80%
of
these
customers
remained
on
list
aler
three
months
๏ Mobile
coupon
pitches
gemng
highest
redemp,on
rate
for
any
other
medium
Next
steps:
๏ Encourage
new
customers
to
return
with
their
friends
๏ Run
campaigns
geared
toward
brand
value
instead
of
coupon
purchases
Source:
ClickZ
MarkeAng
News
25

26. Key
Takeaways
For
Merchants: For
Daily
Deals
Providers:
๏ Perform
due
diligence
to
make
๏ Not
all
revenue
is
good
revenue
sure
daily
deal
right
for
you
๏ Encourage
merchants
to
think
๏ Drive
new
and
repeat
business beyond
the
campaign
๏ Adopt
a
life,me
value
๏ Differen,ate
brand
with
perspec,ve innova,ve
technology
solu,ons
26

27. Any
Ques>ons?
For
more
informa,on
visit
www.msgme.com
More
industry
informa,on
available
on
our
blog
@
blog.msgme.com
Case
studies
are
available
@
clicky.me/msgmecs
Or
contact
us
directly:
marke,ng@waterfallmobile.com
27