Deal Effect will be a commercially trading company which has as its purpose, raising funds for charities in Ireland. Deal Effect’s commercial business will be to supply quality deals at discounts greater than 50% of their recommended retail value. Deal Effect aims to raise over €2.1 million in the next three years for charities participating in the venture. This concept is being proposed by The Wheel, a registered charity.
The Wheel will establish a company limited by guarantee without share capital to run a daily deals website on a commercial basis. This company, Deal Effect, will source deals and promote them through a web platform and via email and social media. Deal Effect will partner with Irish charities to promote Deals to their donor/supporter groups. Purchases that signed-up consumers make through the site will remit an 11% of the purchase price to the charities which are part of Deal Effect. The service is opt-in and subscribers receive an email each day with a promotional offer for that day.
1. The Shelbourne Hotel
Dublin 2 Facebook.com/DealEffect
30th Jan 13
Twitter.com/DealEffect_ie
7.30am
YouTube.com/DealEffectIreland
2. WHAT ARE DAILY DEALS?
An online daily coupon service
offering deals discounted at
50% or more of their normal
retail value. Opt-in service that
emails subscribers a daily offer
for a limited time.
3. Value of Irish DAILY DEALS Industry?
2012: €53 million
spent on daily
deals websites
2012: 15% year-
on-year growth
from 2011.
4. AIM OF DEAL EFFECT
Deal Effect provides a fundraising
platform for the Irish charity &
non-profit sector through a daily
deals website, remitting 11% of
revenue to participating
organisations.
5. HOW WILL DEAL EFFECT WORK?
Deal Effect proposes to :
A. Encourage charities to be founding members
B. Encourage charities to promote the service to
their databases of supporters
C. Offer daily deals discounted at more than 50%
D. Remit 11% of its revenue to charity/non-profits
6. HOW IS THE REVENUE SPLIT?
1). Merchant 70%
2). Charity 11%
3). Deal Effect Revenue 19%
Staff & Operational Costs X
Marketing Costs X
Software Management 4%
Bank Charges 2%
Revenue to The Wheel 1.5%
19% 100%
7. IS THERE A MARKET FOR THIS?
1 Jan – 1 Dec 2012 (information supplied by mydealpage.ie and strictly confidential)
• 1.6 million vouchers sold = 4,500+ each day
• €53 million spent on daily deals = €145,000 each day average
• €75 million saved by purchasing deals
• 14,184 deals done throughout the country
• €32.53 is average price per deal in the Irish market
8. WHAT ABOUT THE COMPETITORS?
1 Jan – 1 Nov 2012
GROUPON 32%
LIVING SOCIAL 21%
GRABONE 14%
PIGSBACK 14%
DEALRUSH 7%
OTHER 12%
• Top 5 sites account for 61% of deals done (8,716) and 89% of
revenue (€35.5m)
• BoardsDeals leaves a market share of about 4.3% up for grabs
after their exit in September.
9. HOW LONG HAVE WE BEEN WORKING ON IT?
Aug 2011 The Wheel approached by Basil Good
Sep – Oct 2011 The Wheel Internal Research & SWOT Analysis
Nov – Dec 2011 Discussions with other charities
Jan – Apr 2012 Formal Focus Group of charities convened
May 2012 Independent Feasibility Report Completed
An e-commerce start-up professional to project
July 2012
manage to investor ready status
Sept 2012 Develop Legal framework
Nov 2012 Project delivered to an investor ready stage
Jan/Feb 2013 Full Investment Secured
April 2013 Launch
10. ARE PEOPLE LIKELY TO SIGN UP?
• 61% of consumers have signed up to an online
discount site.
• 37% of the Irish Adult Population has purchased
a product or service from an online discount site
• 7% purchase at least once a week (€125.84)
• 36% purchase at least once a month (€29.04)
July 2012 figures from the National Consumer Agency
• Longitudinal research by Cone: 84% of
consumers likely to switch brands to one
associated with a good cause
11. CAN TARGETS BE MET THROUGH
CHARITIES?
• Focus group: Databases of 10 charities = 167,000
individuals
• Model based on 8,000 subscribers at launch
• Growth of 500 subscribers daily for 3 months (levelling
off to 100)
• 96,000 subscribers by end of year 1 (DealRush: from a
standing start 100,000 subscribers in 12 months for a 4%
market share)
12. WHY WILL IT SUCCEED?
• Consumers want to support their cause
• Charities get a return of revenue not profit
• Charities return pro-rata to subscribers
• Retailers happier to deal with charities
• Access to potential multiples of the 167,000
individuals (10 charity databases)
• Collaborative effort, economies of scale
13. FINANCIAL ASSUMPTIONS
• 30-50 Charities at Launch – steady increase over 3 years
• 8,000 Subscriber Base at Launch
- increasing daily to > 100,000 by end Feb 2014
- and to > 128,000 by end Dec 2015
• Deal Price - €22 – 66.67% of Market Average
• Initially 5 Deals per week
• Deals capped at 500 Vouchers
• Raising over €2.1 million+ for charity sector in 3 yrs
14. FORECAST INCOME & EXPENDITURE
Deal Effect 2013 2014 2015
Forecast Income & Expenditure 2013 -2015 € € €
TOTAL DEAL REVENUE
(000's) (000's) (000's)
By 2015: Deal
Deal Revenue (Merchant & Deal Effect)
Charity Donations (11% of Total Deal Turnover)
2,910
360
6,673
825
7,676
949 Effect aims to
Total Deal Turnover 3,270 7,498 8,625
INCOME
be in top 3
Deal Effect Revenue from Deals (19%)
Charity Subscriptions
621
9
1,425
6
1,639
6
daily deals site
Deal Effect Total Income 630 1,431 1,645
in Ireland,
EXPENDITURE
Payroll Costs (incl. Employers social insurance)
OSGO Software licence and support
338
131
469
300
536
345
remitting
Credit/Debit Card Commission/bank fees
General Marketing & PR
65
51
150
37
172
43
€2.1m+ to
The Wheel (1.5% of Deal Turnover) 49 112 129
Other (incl. start up and legals)
Total Expenditure
186
821
167
1,236
177
1,402
charities
Surplus / (Deficit) (191) 194 242
Cash Balance at 31st December
Agency Bank Account 636 828 895
Operating Bank Account 46 260 257
15. BRAND STRATEGY
• Brand Positioning: Aimed at more established brands and
reputable merchants with a high end but broad market
appeal
• Consumer insight: Deal Effect saves you money, allows
you to discover new experiences and feel good while
doing so
• ‘FairTrade’ USP: Every deal purchased contributes to a
chosen charity
• Core target market: Females 25-44
• Secondary target market: Adults 25-44 in Dublin, Cork and
Galway
16. DEALS STRATEGY
• National Deals will have priority e.g. Accommodation, retailers
• Best locations for deals are in Dublin, Cork and Galway
• High quality sales team
• Superior customer service experience
• Maintain minimum of 14 days worth of deals in advance
• All deals will adhere to a deal code of ethics
• Deal grouping e.g. hotel,+ event ticket deals
• Great deals – leverage brands
• Focus on retention rates and user’s experience
17.
18.
19.
20.
21.
22.
23. MARKETING STRATEGY
• TV - Bespoke activity
• Digital advertising (online display, email capture form)
• Social Media (paid, communities, targeted, competitions)
• PR & Industry awareness
• Search engine optimisation (SEO)
• Radio
• Trade marketing
• Incentives to current subscribers
• Working closely with charities to leverage their PR and
marketing
24. HOW DO WE DRIVE SALES?
• Email daily deal to subscribers
• Affiliate marketing sites
• Deal aggregator sites
• Social media offers – geographic and demographic
targeting
• Regular social media engagement
• Pay Per Click campaign on search
• Constant evaluation of sales funnel
• Refer a friend
25. WHERE ARE WE NOW?
• Business Plan completed
• Legal advice in place, finalising key documents
• Recruitment drive commenced
• Roll out plan for Spring 2013
– Sales Plan
– Marketing Plan
• Investment from charities ongoing
• Donations/Interest free loans needed from private
sector to reach target of €262,500
27. INVESTMENT REQUIRED: €262,500
Deal Effect Funding Sources €262,500 as at 30 Jan 13
Charities committed
€53,000
20% Private Investment - To
Date
The Wheel
€85,000
32%
Charities TBC
€52,000 Start-up Grants TBC
20%
PRIVATE SECTOR TBC
€35,000
13%
€25,000 €12,500
10% 5%
28. INVESTMENT REQUIRED: €262,500
Deal Effect Funding Sources €262,500 as at 30 Jan 13
Charities committed
€53,000
TODAY 20% Private Investment - To
we are Date
€120,000 The Wheel
€85,000
short of 32%
€262,500 Charities TBC
funding
for €52,000 Start-up Grants TBC
20%
launch
PRIVATE SECTOR TBC
€35,000
13%
€25,000 €12,500
10% 5%
29. Vision for 2015: Deal Effect will be in top 3 daily
deals site in Ireland, remitting €2.1m+ to charities.
promoting equality fighting alcohol
preventing suicide abuse
building affordable
housing
protecting vulnerable coordinating
children emergency relief
providing sports
facilities
alleviating poverty
fighting domestic
violence helping the
homeless
supporting people with
cancer supporting the arts
training guide
dogs for the blind fighting addiction
fighting child promoting independence
abuse for people with
caring for older people
promoting mental disabilities
health