Category Archives: Coupons/Promotions

Groupon Joins Food Delivery Wars

Groupon today announced it would join the online food delivery space, acquiring Baltimore-based OrderUp, which has O&O and affiliated delivery service in 40 markets. Most of the markets are college towns, which is a strongpoint for food delivery.

As Crain’s Chicago Business reports, OrderUp — Uber for your Burrito — raised $7 million in 2014 from investors that included former Living Social CEO Tim O’Shaughnessy, who had been an archrival of Groupon. The service was founded in 2009 and has a strong orientation towards buying existing food delivery services, rebranding them and then reselling them as franchises.

Groupon’s move extends its relationships with restaurants and other food providers. It is consistent with its efforts to migrate these advertisers from occaisional deals into its “always on” marketplace, where it enjoys a well-rounded relationship based on the provision of offers, advertising, analytics, payments and Point of Sales.

It had been reported in April that Groupon was seeking to divest its Breadcrumb analytics, payments and Point of Sales business to a competitor such as Square. The acquisition of OrderUp could be less synergistic if Breadcrumb was actually divested.

With the OrderUp acquisition, Groupon will compete against other, more established food delivery companies, including Grubhub/Seamless, Yelp’s Eat24 and Delivery.com. Rather than focusing on winning market share against these players, it seems more likely that Groupon will initially seek incremental sales that support its broader initiatives.

Wanderful Bets on Mobile ‘Cash Dash’

Wanderful Media, the newspaper-owned promotions company, has expanded on its original Find&Save coupon portal, which now includes 500 national and regional merchants, and 18,000 brands. The new expansion efforts are focused on Cash Dash, a geolocation promotions feature found within the Find&Save Apps, and Coffee Table, an iPad-oriented retailer catalog that it acquired at the end of 2014.

The big bet is on expanding Cash Dash, which puts Wanderful’s network – which not only includes Wanderful’s newspaper owners, but also key Yellow Pages and others — into the world of incentive promotions. The original version sent promotions to shoppers while they are at retail stores and presumably, in a shopping context. A typical offer might be “Spend $15 at Walgreens, get $5 back from Find&Save.”

These aren’t real time, card-linked offers, which would provide real time feedback; more comprehensive buying information; and ties with financial institutions. In the interest of simplicity, no credit card is used. Instead, consumers snap a picture of their receipt to validate (and track) their spending on a personalized basis. The new improved version adds additional capabilities designed to add shopper frequency and spending, including a “Cash Cart” that lets shoppers select items from a weekly circular ad to create their own cash back offers.

All of the efforts require consumers to get comfortable taking photos of their receipts, and to remember to do so — something that Wanderful execs say has not been an issue.

Speaking about Cash Dash at BIA/Kelsey’s NATIONAL event in March, Dallas Morning News SVP of Business Development and Niche Products Grant Moise noted that major retailers wanted a one stop mobile promotions solution. “It has driven up to $100,000 in sales for some advertisers,” he said at that time.

Signpost Raises $20.5 Million to Provide CRM-Based SMB Services


Signpost announced today it has raised a new $20.5 Million round, which will let it build out an evolved, CRM-based “close the loop” strategy of tracking SMB digital sources via transactions, social media, websites and email.

The current round has been led by led by Georgian Partners along with Spark Capital, OpenView Venture Partners, Scout Ventures and Jason Calacanis’ Launch Fund. The company has raised $36.5 Million since its founding in mid-2010. Earlier funders included Google Ventures.

Signpost’s evolution has been a dramatic one, fully reflecting the changes in local online marketing. The company launched as a provider of sales agents for local SMB deals, then evolved into an SMB-oriented SAAS company with offices in New York, Austin and Denver. In its case, deals gave way to a broad range of marketing services, including analytics, marketing automation, loyalty marketing, referrals and review acquistion.

The company now serves over 10,000 customers, and says it is eyeing a large customer set of six million very small businesses with 2-10 employees. Most of these have not previously had access to CRM and are unlikely to subscribe to pricey CRM tools such as Salesforce.

The inclusion of financial transaction information provided by a third party is something that is increasingly being added to marketing services. Google, ForwardLine and others similarly incorporate financial transaction information.


BIA/Kelsey Managing Director Rick Ducey, Signpost’s Ryan Sommer and Peter Krasilovsky play “Chinese style.”

MyTime to Compete for Scheduling, SMB Services

We’ve long seen scheduling as a possible anchor for SMB marketing services (coupons, leads, promotions, analytics, upsells et al). Obviously, we are not alone. More than 75 players are positioning themselves to lead the way in scheduling, including MindBody, Booker, Intuit, ReachLocal, Yodle, Square, GenBook, Agendize, Schedulicity, Moon Valley Software, MaxiPage, Hakema and others.

An alternative approach to the space has been taken by PingUp, a new player that just launched this week, and three- year- old MyTime. Both players have focused primarily on searching, aggregating and confirming online appointments from scheduling providers, while adding in marketing services as an additional layer.

From its inception, however, MyTime has also positioned itself up as an intermediary and a media and commerce channel in its own right. Now, MyTime has crossed the line, armed with a new round of $9.25 Million from Khosla, Upfront Ventures, shopping mall giant Westfield and others — on top of $3 Million raised in 2012.

While it will continue to aggregate and work with other scheduling providers, the 100 person, San Francisco-based company will also compete directly against them via two products: MyTime Scheduler, a sophisticated scheduling program.; and MyTime Marketplace, a “fully responsive consumer destination to find and book appointments with nearby service businesses.”

The services cost from $9.99 to $39.99 a month, depending on the number of employees supported and types of services taken. The pricing is seen as significantly lower than other scheduling software providers.

Anderson notes that the launch of MyTime’s Scheduler and Marketplace products is a natural extension of its appointment aggregation service, which is already driving “nearly one million people” a month to its Web site and mobile apps. He contends that the company’s efforts have also been set apart by a more seamless consumer experience.

Driving MyTime’s new strategy is the rapid adoption of mobile tools and services by consumers. “We know consumers prefer to book and pay for things through their smartphones now, but most businesses haven’t made it possible to book them online yet,” says Anderson. “Everyone knows that consumers are ahead of the SMBs.”

Businesses that take leads from MyTime will pay a 37 percent commission. MyTime also provides an attractive 2.69 percent rate for payments, undercutting Square’s 2.75 percent commission.

The company says it has built a relationship with 10,000 businesses, with 1,000 new businesses are signing up a month. Anderson hopes to see that number double or triple during the next quarter and converted into paying accounts– due in part, to the new products, and its sales team. “Our goal is to go after the two million local businesses and get them on Scheduler within 5 years,” he says.


MyTime CEO Ethan Anderson

Groupon Re-thinks its Ambitious SMB Platform

Groupon is apparently thinking hard about dismantling its ambitious SMB platform, and refocusing on its core strengths in daily deals, goods and travel. Reports have come out saying that Groupon is offering to sell its Breadcrumb POS platform, which had been rebranded as Gnome; and also sell its interest in Serviz, a Local On Demand Economy home services company that has been developed as ClubLocal by former ReachLocal CEO Zorik Gordon. Groupon has also been in talks to cash in on T-Mon, the South Korean ecommerce service that it bought last year from Living Social for $260 Million, but could now been seen as a cash cow that could allow Groupon to invest in other areas.

According to Bloomberg Business Week, Piper Jaffray analyst Gene Munster thinks that the Breadcrumb part of Gnome could fetch $100 million, and that Groupon’s stake in Serviz could be worth $30 million. T-Mon, which is seen as an ecommerce winner in Asia, could ultimately get as much as $800 million. Groupon’s apparent decision to explore the sale of Gnome is the most interesting to us. A report in Re-Code said that executives casually offered to sell at least a portion of it to Square.

In developing Gnome, which has been built on top of its June 2012 purchase of Breadcrumb, Groupon assessed its widespread, international merchant base and concluded it could reinforce and upsell that base and position itself as a global ecommerce giant. It would do so via a compelling package of highly discounted point of sales devices, payment services merchant analytics and strategically targeted offers to customers.

The investment in Serviz – which gave the greenlight to Gordon’s team to continue developing a service that was not going to go further at ReachLocal – was also seen as strategic as Groupon looked for more and more ways to connect and broaden the local marketplaces. Coincidentallly, it looks like Groupon is giving up on having a piece of the home services market just as Amazon and Google are diving in.

Is Groupon giving up too early? We’ve been impressed with the capabilities of the Gnome platform and the strategic vision behind it. The Serviz product is also impressive, although perhaps too rarified for Groupon, as it aims for higher ticket repairs and services. And separately, T-Mon is going to require enormous investments to grow and maintain its market share in a business that has come to not only include deals but also ecommerce, fashion and services.

The bottom line here, however, is that Groupon may have concluded that its merchant base sees it as a 3rd, 4th or 5th choice for this kind of activity – rather than as a substitute for blue chip and diverse players such as American Express, VeriFone, First Data and Salesforce . While Groupon can always work to keep repositioning itself, it currently seems most secure as a provider of discounted goods and deals that it continues to mold into an always on marketplace.

Thanx CEO Zach Goldstein: ‘Let’s Call Them Card-Linked Services, Not Offers’

thanx

The BIA/Kelsey “Status and Review of Card-Linked Offers, 2015” report, which is based on in-depth interviews with industry leaders, has generated a lot of interest among the various shareholders of card-linked offers and non-advertising marketing solutions (including financial institutions, tech vendors and publishers).

We’re especially interested in the feedback from Thanx CEO Zach Goldstein, who tells us he’d like to see the Card Linked Offer space rebranded as “Card-Linked Services.” The main reason? “There is a lot of value that can be delivered to a consumer by linking their card without receiving and fulfilling an offer,” he says. “In our case, for instance, easier reward accrual for loyalty programs.”

In Goldstein’s view, the report — which is bullish on momentum in the card-linked offer space — could be even more bullish. He’s seeing conversion rates for Thanx campaigns ranging from 22 percent into the low-30 percent range. This is well above the 3 percent to 12 percent conversion rates that we cited as the norm.

Goldstein also takes issue with the report’s conclusion that cashback is the preferred reward type — something that is widely assumed by the financial institutions and related ecosystem, but sometimes disputed by players that focus more on loyalty.

“Many of our merchants would rather sacrifice margin than top-line revenue,” he says. “We actually see far more businesses who like to use card-linked for the ‘accrual’ portion of the experience (tracking spending to qualify) but redeem rewards through a more traditional channel or through mobile.” For more of Goldstein’s views on card linking, click here.

The CardLinx Association, which partnered with us on the report, is going deep on card-linked offers with a great lineup of speakers in New York April 28. We hope to see you there.

Booker Software Raises $35 Million; CEO Josh McCarter Talks to BIA/Kelsey

Booker Software announced today that it has raised $35 Million, which it will use to invest in sales and marketing capabilities and in developing vertical-specific products that “drive more value to merchants,” said CEO Josh McCarter, in a discussion with BIA/Kelsey.

McCarter noted that 9,000 locations are under contract and over 60,000 business users. These are users who are “logging in every day. They are not just signing on once a month” to create a promotion or similar feature. They use Booker’s services as an integral part of their business.

Next steps for the company will further leverage all the trends impacting services-based SMB marketing, including CRM; retention marketing; Point of Sales services; scheduling; and mobile apps via a partnership with Como.

“Last year, we refocused on things that help you grow and operate more efficiently,” said McCarter, noting that the company rebranded from Gramercy One to specifically focus on the SMB space, which now accounts for 80 percent of its revenue. “The data that Booker can aggregate really powers the growth engine,” he said. Services such as email and CRM are only as powerful as the data they can use.

While spas and salons continue to account for a significant portion of the company’s business (dating to its origins as SpaFinder), a number of verticals hold great promise, said McCarter. Pet services, daycare and after-school services (music lessons, art lessons) are doing “very well.” Another area of growth is a JV with The Golf Channel that enables customers to book tee times and other services.

The new round of funding is on top of $40 million previously raised. Several mid-sized funders that specialize in SMB services were included in the round, including Signal Peak (InfusionSoft) and Jump Capital (Swift Pages). The round was led by Medina Capital, a cloud infrastructure specialist.

Other investors included Revolution (Steve Case and Ted Leonsis), Bain Capital, TDF Ventures and Grotech Ventures. In addition, a “strategic investment” was made by First Data, the payment processing giant, who will be announcing details of its relationship with Booker in coming months.

McCarter noted that each investor brings a unique appreciation of Booker’s goals in serving the SMB community, which has been “underserved” by larger VCs, which McCarter called “SMB-averse.” But there is a definite need for SMB services, which focus less on return policies or other ecommerce issues. They are more about everything that a business needs, from scheduling services to POS innovation to equipment rentals. It is a $2.4 trillion space, he argued.

Booker Software CEO Josh McCarter