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Webinar: Daily Deals and Mobile Engagement Explained

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  • 1. Waterfall  Industry*  Insights Kane  Russell,  VP  of  Marke,ng Waterfall *  Daily  Deals  And  Mobile  -­‐  Engagement  Explained  
  • 2. Waterfall  Mobile  and  the  Msgme  Pla4orm Waterfall  Mobile ๏ Founded  August  2005 ๏ Offices  in  SFO  (HQ),  NYC  &  Aus=n ๏ Backed  by  Vista  Equity  Partners   ๏ Cross-­‐channel  mobile  &  social  CRM  via  SMS,   MMS,  QR  Codes,  IVR,  Facebook  &  TwiRer ๏ Free  trial:  www.waterfall.com ๏ API  suite:  apidocs.waterfall.com ๏ Custom  applica=on  development ๏ Short  code  provisioning,  cer=fica=on   &  audit  management
  • 3. ๏ 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 Objec8ves
  • 4. Daily  Deals  -­‐  “Hot” All  Summer/Fall  2011  Headlines
  • 5. Daily  Deals  -­‐  “Not” All  Summer/Fall  2011  Headlines
  • 6. What’s  Affec8ng  Revenue?   $0 $15 $30 $45 $60 $75 $90 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 $62 $89 $81 $76 $55 $46 $53 $29$31 $26 $21$19 $14 $11 Millions  of  Dollars Month/Year Source:  Techcrunch 2010  -­‐  2011  Groupon  Revenue  EsGmates
  • 7. Is  Deal  Fa8gue  A  Factor?   Subscribed  to  daily  deals Subscribed  to  Groupon  &  Living  Social Only  buy  from  Groupon Subscribed  to  at  least  3  providers Been  subscribed  more  than  1  year Now  opening  fewer  or  none  of  offers Will  buy  fewer  deals  than  have  in  past 68% 74% 20% 36% 41% 72% 86% Source:  Local  Offer  Network  EsAmates Daily  Deals  Consumer  Survey  Data  (n=943)
  • 8. Daily  Deals  Industry  Revenue  Projec8ons Source:  Local  Offer  Network  EsAmates 2010 2011 $2.67 $1.12 US  Group  Buying/Daily  Deals  Market   INDUSTRY  REVENUE  (GROSS) in  billions  of  dollars
  • 9. Daily  Deals  Industry  Offers  Growth Source:  Local  Offer  Network  EsAmates 10,000 20,000 30,000 40,000 2010  Q1 2010  Q2 2010  Q3 2010  Q4 2011  Q1  (E) 6,895 14,462 19,676 22,163 39,993 US  Group  Buying/Daily  Deals  Market TOTAL  OFFERS  PUBLISHED
  • 10. Economics  of  Daily  Deals Consumers Merchants Daily  Deals  Service  Providers Before Deal  Day During A_er
  • 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:  Ome  unOl  provider  pays  merchant ๏ Average  Gcket:  the  normal  purchase  amount  at  merchant  establishment
  • 12. Deal  Day ๏ Merchant  revenue:  amount  of  revenue  generated  for  merchant ๏ Provider  revenue:  amount  of  revenue  generated  for  provider   ๏ RedempGon  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  transacOons ๏ 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
  • 13. AMer  Deal  Day ๏ “Yelp”  effect:  percepOon  of  merchant  aQer  daily  deal  promoOon ๏ Repeat  customers:  number  of  consumers  who  return  to  merchant ๏ “Deal  hunter”  effect:  number  of  consumers  willing  to  buy  at  full  price
  • 14. An  Example  Daily  Deal  Promo8on According  to  terms  from  Techcrunch  “Stop  The  Hate,”  hgp://tcrn.ch/nIWiQ:
  • 15. So  How  Can  This  Work  For  A  Merchant? Unfortunately,  not  as  simple  as  “merchants  should  negoGate  beger”:
  • 16. Daily  Deals  Industry  Factors Low  margin  businesses  face  much  greater  risks  running  a  daily  deal:
  • 17. Daily  Deals  Execu8on  Factors Daily  deals  can  be  profitable  if  they  agract  new  and  repeat  business:
  • 18. PuTng  It  All  Together Higher  margin  business  +  negoGate  terms  +  execute  well:
  • 19. Daily  Deals  Success  Factors ๏ For  Merchants -­‐ NegoOate  beRer  terms  with  deal  providers -­‐ Make  sure  daily  deals  is  right  for  your  business ๏ For  Merchants  &  Providers -­‐ ARract  new  customers  with  daily  deals -­‐ Make  sure  new  customers  return -­‐ Recruit  these  new  customers  as  brand  ambassadors
  • 20. Mobile  Marke8ng  CRM 1)    Build  a  mobile  subscriber   database 2)  MoneGze  database   through  interacGve  mobile   communicaGon  campaigns IVR
  • 21. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester Which  describes  your   mobile  strategy?  
  • 22. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester What  kind  of  investment  in   mobile  do  you  foresee  in   2011?  
  • 23. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester What  do  you  feel  are  top  uses  for  mobile?  
  • 24. Mobile  and  Daily  Deals ๏ ABract  new  customers  with  daily  deals Vet  daily  deal  sign  ups  against  acGve  subscriber  list NoGfy  current  customers  of  alternaGve  promoGons ๏ 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  interacGve  campaigns
  • 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  aQer   three  months ๏ Mobile  coupon  pitches  geZng  highest   redempOon  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
  • 26. Key  Takeaways For  Merchants: ๏ Perform  due  diligence  to  make   sure  daily  deal  right  for  you ๏ Drive  new  and  repeat  business ๏ Adopt  a  lifeOme  value   perspecOve For  Daily  Deals  Providers: ๏ Not  all  revenue  is  good  revenue ๏ Encourage  merchants  to  think   beyond  the  campaign ๏ DifferenOate  brand  with   innovaOve  technology  soluOons
  • 27. Any  Ques8ons? For  more  informa+on  visit  www.waterfall.com Or  contact  us  directly:  marke+ng@waterfall.com More  industry  informa+on   available  on  our  blog  @   waterfall.com/blog/

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