Waterfall	
  Industry*	
  Insights
Kane	
  Russell,	
  VP	
  of	
  Marke,ng
Waterfall
*	
  Daily	
  Deals	
  And	
  Mobile...
Waterfall	
  Mobile	
  and	
  the	
  Msgme	
  Pla4orm
Waterfall	
  Mobile
๏ Founded	
  August	
  2005
๏ Offices	
  in	
  SFO...
๏ Daily	
  deals	
  -­‐	
  “hot”	
  or	
  “not?”	
  
๏ Economics	
  -­‐	
  how	
  daily	
  deals	
  create	
  value
๏ Succ...
Daily	
  Deals	
  -­‐	
  “Hot”
All	
  Summer/Fall	
  2011	
  Headlines
Daily	
  Deals	
  -­‐	
  “Not”
All	
  Summer/Fall	
  2011	
  Headlines
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 11/1...
Is	
  Deal	
  Fa8gue	
  A	
  Factor?	
  
Subscribed	
  to	
  daily	
  deals
Subscribed	
  to	
  Groupon	
  &	
  Living	
  ...
Daily	
  Deals	
  Industry	
  Revenue	
  Projec8ons
Source:	
  Local	
  Offer	
  Network	
  EsAmates
2010 2011
$2.67
$1.12
...
Daily	
  Deals	
  Industry	
  Offers	
  Growth
Source:	
  Local	
  Offer	
  Network	
  EsAmates
10,000
20,000
30,000
40,000
...
Economics	
  of	
  Daily	
  Deals
Consumers
Merchants
Daily	
  Deals	
  Service	
  Providers
Before
Deal	
  Day
During
A_er
Before	
  Deal	
  Day
๏ Daily	
  deal	
  value:	
  amount	
  consumer	
  would	
  pay	
  normally
๏ Daily	
  deal	
  price...
Deal	
  Day
๏ Merchant	
  revenue:	
  amount	
  of	
  revenue	
  generated	
  for	
  merchant
๏ Provider	
  revenue:	
  am...
AMer	
  Deal	
  Day
๏ “Yelp”	
  effect:	
  percepOon	
  of	
  merchant	
  aQer	
  daily	
  deal	
  promoOon
๏ Repeat	
  cus...
An	
  Example	
  Daily	
  Deal	
  Promo8on
According	
  to	
  terms	
  from	
  Techcrunch	
  “Stop	
  The	
  Hate,”	
  hgp...
So	
  How	
  Can	
  This	
  Work	
  For	
  A	
  Merchant?
Unfortunately,	
  not	
  as	
  simple	
  as	
  “merchants	
  sho...
Daily	
  Deals	
  Industry	
  Factors
Low	
  margin	
  businesses	
  face	
  much	
  greater	
  risks	
  running	
  a	
  d...
Daily	
  Deals	
  Execu8on	
  Factors
Daily	
  deals	
  can	
  be	
  profitable	
  if	
  they	
  agract	
  new	
  and	
  re...
PuTng	
  It	
  All	
  Together
Higher	
  margin	
  business	
  +	
  negoGate	
  terms	
  +	
  execute	
  well:
Daily	
  Deals	
  Success	
  Factors
๏ For	
  Merchants
-­‐ NegoOate	
  beRer	
  terms	
  with	
  deal	
  providers
-­‐ Ma...
Mobile	
  Marke8ng	
  CRM
1)	
  	
  Build	
  a	
  mobile	
  subscriber	
  
database
2)	
  MoneGze	
  database	
  
through	...
Time	
  To	
  Invest	
  In	
  Mobile	
  Is	
  Now
Source:	
  Forrester
Which	
  describes	
  your	
  
mobile	
  strategy?	...
Time	
  To	
  Invest	
  In	
  Mobile	
  Is	
  Now
Source:	
  Forrester
What	
  kind	
  of	
  investment	
  in	
  
mobile	
...
Time	
  To	
  Invest	
  In	
  Mobile	
  Is	
  Now
Source:	
  Forrester
What	
  do	
  you	
  feel	
  are	
  top	
  uses	
  ...
Mobile	
  and	
  Daily	
  Deals
๏ ABract	
  new	
  customers	
  with	
  daily	
  deals
Vet	
  daily	
  deal	
  sign	
  ups...
Case	
  Study:	
  Gelato	
  Spot
Success	
  to	
  date:
๏ Had	
  customers	
  opt-­‐in	
  for	
  mobile	
  subscriber	
  
...
Key	
  Takeaways
For	
  Merchants:
๏ Perform	
  due	
  diligence	
  to	
  make	
  
sure	
  daily	
  deal	
  right	
  for	
...
Any	
  Ques8ons?
For	
  more	
  informa+on	
  visit	
  www.waterfall.com
Or	
  contact	
  us	
  directly:	
  marke+ng@wate...
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Webinar: Daily Deals and Mobile Engagement Explained

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Webinar: Daily Deals and Mobile Engagement Explained

  1. 1. Waterfall  Industry*  Insights Kane  Russell,  VP  of  Marke,ng Waterfall *  Daily  Deals  And  Mobile  -­‐  Engagement  Explained  
  2. 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. 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. 4. Daily  Deals  -­‐  “Hot” All  Summer/Fall  2011  Headlines
  5. 5. Daily  Deals  -­‐  “Not” All  Summer/Fall  2011  Headlines
  6. 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. 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. 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. 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. 10. Economics  of  Daily  Deals Consumers Merchants Daily  Deals  Service  Providers Before Deal  Day During A_er
  11. 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. 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. 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. 14. An  Example  Daily  Deal  Promo8on According  to  terms  from  Techcrunch  “Stop  The  Hate,”  hgp://tcrn.ch/nIWiQ:
  15. 15. So  How  Can  This  Work  For  A  Merchant? Unfortunately,  not  as  simple  as  “merchants  should  negoGate  beger”:
  16. 16. Daily  Deals  Industry  Factors Low  margin  businesses  face  much  greater  risks  running  a  daily  deal:
  17. 17. Daily  Deals  Execu8on  Factors Daily  deals  can  be  profitable  if  they  agract  new  and  repeat  business:
  18. 18. PuTng  It  All  Together Higher  margin  business  +  negoGate  terms  +  execute  well:
  19. 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. 20. Mobile  Marke8ng  CRM 1)    Build  a  mobile  subscriber   database 2)  MoneGze  database   through  interacGve  mobile   communicaGon  campaigns IVR
  21. 21. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester Which  describes  your   mobile  strategy?  
  22. 22. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester What  kind  of  investment  in   mobile  do  you  foresee  in   2011?  
  23. 23. Time  To  Invest  In  Mobile  Is  Now Source:  Forrester What  do  you  feel  are  top  uses  for  mobile?  
  24. 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. 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. 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. 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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