4. R4U Offers Business model
Customer signs
with R4U Offers
Deal reaches
critical mass
Customers
pay R4U
Offers
R4U Customer
Offers redeems
features coupon at
Merchant R4U Offers
deal merchant
signs up R4U Offers pays merchant
decides which deals
are featured
share
in a Country area
Net Payments made
directly, customer to
merchant, using platform
of payment by R4U Offers.
5. R4U Offers Business model
Brazil local
GAP, Body
Shop
# of geographies national
New experimental
feature
international
# of deals x Main deal
Categories/
geography
R4U Offers
R4U Offers
net revenue x Gross/ List price
Function of category;
Discounted deal seems
price x to have increased
Net deal size x Discount to customers
(%)
Share to R4U Offers (%)
Typically 30-
~ 50%. May trend upwards 50%
due to acceptance pressure.
6. R4U Offers Customers
Benefit to customers Customer demographics
Deep discounts Early adopters: Highly affluent with disposable
Discover services/merchandise that they didn’t income
know of: ‘ Urban females’
Access to new services/merchandise 18-44 yrs
4 smaller ‘side deals’ in addition to Likely facebook and Twitter users
main deal
60k-200k users/ country
Deal personalization based on
voluntary disclosure of preferences 100- 1000 users/deal/country
Deals divvied up by Countries
7. Merchant Observations
R4U Offers proposition: Guaranteed revenue and large number of new customers.
Key Merchant Economics Best Suited Businesses
Revenue: Typically retains 50% of the deal High disclosure for fixed business
minus credit card fees High disclosure of offers, by customer indication
Redemption rate: 80% Business thriving on repeat customers.
Incremental spending: Gap expectation that Rice University study:
customers will spend more than just $50, likely 66% successful
upward of $75 to $100 once in the store Examples: lifestyle businesses, e.g. services
Repeat customers: 22% repeat business (82% successful), sailing, restaurants
(58% successful), education
Key Issues Today: Normal Sales R4U Offers
- Low sales for groups - Minimum sale 5 customers by offer
8. Merchant Perspective on Customer Interaction
Respond to Get customer to follow on
Merchant
Like it on
Offer on
Advertise on
9. Present / Future Competitors
(None of them acting exclusively in Educational area like us)
Company
Groupon •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
Click on •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
BuyWithMe •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
Google • GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
Ebay GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
Yahoo •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
Local •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
newspapers
Facebook •GENERAL MERCHANTS NOT EXCLUSIVELY TO EDUCATIONAL PURPOSES
10. Economic Characteristics
Positives Plusses
High impact of network effect Brand
No technology barriers to entry Economies of scale (‘winner takes most’)
No switching cost for merchants and customers Link to access Partner Website for more
information
Increase substantially number of sales
Aggregate sales, in case client doesn't find
Sale only for minimum group indicated by
product or service interested, he can contact
merchant
R4U offers to know other types of offers not
Low cost to customer acquisition
listed by each merchant.
Pay just commission per product or service
sold.
