Posts Tagged ‘Groupon’
Monday, May 20th, 2013
Based on polling more than 500 restaurant decision makers, including 152 who have participated in daily deal campaigns, and taking into consideration what prior research has shown, Groupon (NASDAQ: GRPN) and the National Restaurant Association are providing restaurateurs with some of the top tactics for success with daily deal marketing campaigns.
While these tactics are specific to restaurants, we think almost any retailer can gain insight into what makes daily deals work from them.
Here’s an infographic illustrating the findings:
Research shows that best practices for restaurateurs to help ensure daily deal success include:
- Prepare staff to focus on customer service, look for upsell opportunities and track offer redemption
- Schedule daily deal timing based on business needs and seasonality
- Estimate and understand the promotion’s impact on profitability
- Measure success by using free tools provided by daily deal company
- Encourage repeat visitors with a customer loyalty program
Results from the recent online survey conducted by Ipsos MediaCT showed restaurateurs who had successful daily deal experiences stood out as experimental marketers that use a variety of different channels and tactics to drive customer acquisition and retention:
- 94 percent engage with customers via social media (vs. 75 percent of non-daily deal users)
- 77 percent have run more than one daily deal
- 73 percent connect with customers via email (vs. 59 percent of non-daily deal users)
- 79 percent monitor online review sites to see what others are saying about their business (vs. 68 percent of non-daily deal users)
- 71 percent have promoted their business with traditional newspaper and magazine ads (vs. 58 percent of non-daily deal users)
“Daily deals remain a very popular form of marketing for our members, and these are some important steps restaurateurs can take to help ensure a greater return on their investment,” said Julia Kanouse, VP, Strategic Marketing, National Restaurant Association.
“This study reveals how daily deals and the analytical tools that Groupon provides have become a powerful and measurable part of an active restaurateur’s marketing mix,” said Sanjay Gupta, VP, Merchant Marketing, Groupon.
Groupon and the National Restaurant Association have an ongoing partnership to provide restaurateurs with educational content and important marketing resources to help their businesses grow. This content will reside on www.grouponworks.com andhttp://www.restaurant.org.
Wednesday, June 20th, 2012
By Allan Maurer
Chicago-based Groupon, (Nasdaq:GRPN) the daily deal site, got a share price boost Monday after Morgan Stanley upgraded the stock, which is still trading far from its initial public offering price of $20.
Morgan Stanley said Groupon’s 33 percent first-quarter rise in North American revenue came from better user-targeting. Such personalization could help avoid “deal fatigue and boost margins, it said.
Some analysts also cited Groupon’s better repeat merchant rate of 41 percent as a major plus factor.
Bloomspot says look at customer repeat rate
But San Francisco-based Bloomspot, yet another player in the crowded digital deals space that focuses on connecting high end merchants with targeted customers, suggests that’s not the metric that should interest merchants when they choose daily deal partners.
Instead, the firm suggests that customer repeat rates (how many times a customer returns to a merchant after redeeming an offer) – and spending numbers (how much a customer spends above the ticket price of the initial offer) are the important figures.
Huge repeat business numbers
Today, Bloomspot released internal data showing that 72 percent of its customers return to a business after redeeming their offers and the average overspend was $140.
Across verticals, customers spend beyond the price of the promotion. For example, in the fine dining category, customers have spent more than three times above the original price of the certificate, or $150. Beauty and spa offers demonstrate an average of $174 in spend above the offer price.
Bloomspot also boasts a 54 percent merchant repeat rate, with 87 percent of merchants saying they will repeat.
Unusual business model
Bloomspot’s unusual business model takes credit card data at places where it runs an offer and uses it to predict how much a customer will spend on the offer, guaranteeing a certain level of profitability. If the offer misses the guarantee, Bloomspot makes up the difference from its own commission. That’s something of a no-lose deal for the merchant.
“As a company whose employees work on a commission basis, any special we run needs to attract the type of clientele who do not visit an establishment only when they have a massive coupon, but rather use coupons to explore the market and then return to those companies who best serve their needs,” said Brad Drummer, owner of Washington DC’s Nusta Spa.
“Lucky for us, Bloomspot put us in touch with just such a base of amazing customers that purchased many additional services at full price and scheduled their next visit on the spot. One of our customers bought a $70 deal and has been back 11 times. She’s spent almost $1,000 in-store since we ran! I’m glad we chose Bloomspot to represent our brand.”
Bloomspot has raised about $51 million in venture backing, not quite in the same league as Groupon and Living Social, but entirely respectable.
Many daily deal sites bit the dust
For a while it seemed as if a new daily deal site popped up every week, many in niche markets. But smaller players drop out almost as fast as they are created. At the beginning of 2012, Daily Deal Media said that 798 daily deal sites closed up shop in the last six months. The total number of sites globally fell 7.61 percent in that period.
We’ve seen conflicting reports regarding consumer acceptance of daily deals. In September last year, a study from researchers at Rice University and Cornell University showed that the companies are more popular than ever among consumers.
“The key finding is that there is no evidence of waning interest among consumers of daily deal promotions,” said Rice University’s Utpal Dholakia, co-author of “Daily Deal Fatigue or Unabated Enthusiasm?” “In fact, the more deals purchased by an individual, the more enthusiastic they seem to be.”
Monday, April 2nd, 2012
The public markets showed a strong appetite for U.S. venture capital companies in the first quarter but corporations did not as the pace of acquisitions slowed dramatically.
Twenty companies held initial public offerings (IPOs) during the first quarter making it the most active quarter for IPOs since the fourth quarter of 2007 and the most active first quarter since 2000.
Ninety-four companies were acquired for $18.1 billion during the same period, the second-straight quarter of declining deal volume for mergers and acquisitions (M&As), according to Dow Jones VentureSource.
“Greater stability in the public markets, more corporations opening venture units to work closely with startups without acquiring them, and a continued disconnect between entrepreneurs’ asking price and what corporations are willing to pay have contributed to a steady decline in M&A activity,” said Jessica Canning, global research director for Dow Jones VentureSource.
Small- and Mid-Cap IPOs Take Center Stage
Twenty companies raised $1.4 billion through public offerings in the first quarter, significantly more exits and capital than the 11 IPOs that raised $768 million during the first quarter of last year.
“Big exits by Groupon and Zynga dominated the end of 2011, but small- and mid-cap IPOs have taken center stage so far this year,” said Zoran Basich, editor of Dow Jones VentureWire. “The public markets proved receptive to a broad range of companies, which is a positive sign for the industry.”
Currently, 50 U.S. venture-backed companies are in IPO registration. Thirteen of those companies filed during the first quarter.
It took companies a median of $68 million and 7.7 years to reach an IPO. That represents a 22% drop in capital raised but an increase in time from 6.2 years during the same period a year ago.
Google, 2011′s Most Active Acquirer, Sits Out As Groupon Steps Up
Ninety-four mergers, acquisitions and buyouts raised $18.1 billion in the first quarter, a 32% decrease in deals and 42% increase in capital raised from the same period last year. The median price paid for a company spiked to $190 million from$43 million in the first quarter of last year.
Notably, Google, which was the most active acquirer of venture companies in 2011 with 12 acquisitions, did not buy any companies in the first quarter of 2012. Groupon, however, has been snapping up venture companies at a pace that rivals Google’s in 2011. Flush with cash after raising $700 million through its November IPO, Groupon acquired six venture companies in the first quarter, double the three acquisitions the company made throughout 2011.
To reach an M&A or buyout, companies raised a median of $13 million in venture financing, 13% less than in the first quarter of 2011, and took a median of 4.9 years to build their company, slightly more time than the 4.6-year median a year earlier.
Tuesday, January 31st, 2012
Andreessen-Horowitz, which backed Groupon, Skype, Zynga and Facebook, has raised $1.5 billion for its third fund, bringing its total amount under management to $2.7 billion.
Facebook is widely expected to file for an intial offering of public stock this week – in what is likely to be the biggest IPO event of the entire year.
Ben Horowitz, co-founder and general partner of Andreessen-Horowitz said in a statement that, “We’re remaking the modern venture capital firm and entrepreneurs are responding to our unique approach.”
Horowitz also wrote about why the firm has raised $2.7 billion in two years in a blog post, where he clearly identifies that different approach.
“We set out to design a venture capital firm that would enable founders to run their own companies,” he explains. That meant the firm’s general partners had to “be an effective mentor for a founder striving to be a CEO. This is why so many of our General Partners are former founders or CEOs or both, and they are all highly focused on helping founders become outstanding CEOs.”
The firm also backs well-known startups Foursquare, Fab, AirBnB, and Pinterest, which has been rapidly growing its footprint and gaining increasing attention in recent months and weeks.
Friday, November 18th, 2011
Groupon managed a highly successful initial public offering of stock earlier this month that opened at a higher than planned share price which then soared 40 percent. Angie’s List, which went public Wednesday, saw its shares jump 25 percent Thurdsday.
Now Yelp, which provides user reviews of restaurants, shopping, nightlife and entertainment, has filed for a $100 million IPO.
The number of shares to be offered and the price range for the offering have not yet been determined. A portion of the shares will be issued and sold by Yelp, and a portion will be sold by certain stockholders of Yelp.
Tech firms still in the wings include Zynga, Facebook, with others likely to line-up if the IPO window stays open any appreciable length of time. IPO activity had dramatically dropped in the third quarter due to economic volatility caused by European debt problems and the slow U.S. economy.
What do you think, readers? Will this IPO window provide time for more tech companies to go public? Will that stimulate increased venture backing for new tech firms?
Here’s VentureBeat’s take on the tech IPO window.
Monday, November 14th, 2011
Despite stock market volatility, tech firms, encouraged by successful initial public offerings by firms such as Groupon, are once again eyeing IPOs, but a new survey by Ernst & Young points out the costs of going public.
According tothe survey, a new U.S. listed public company can expect to spend, on average, an additional $2.5 million annually post IPO, excluding the one-time costs related to executing the IPO.
A large part of the true incremental costs to be a public company includes compensation to attract and retain top management and board members, which ultimately helps secure investors and benefits the company in the long term.
Moreover, 80% of all companies made new investments in IT or software applications in contemplation of going public. 60% of companies made investments in an equity software package. 25% of the companies surveyed acquired new enterprise resource planning (ERP) software prior to the IPO.
Ernst & Young LLP’s inaugural True Costs of IPOs Survey examined the experiences of 26 companies that went public in the U.S. between 2009 and 2011.
The survey group included companies of varying sizes, ranging from annual revenues below$100 million to over $4 billion, with the average and median annual company revenues of $517 million and $143 million, respectively.
Companies operated in a wide range of industries, including healthcare, real estate, biopharma, technology, industrial products, financial services, retail and manufacturing. The survey focused on four key areas: management, board, advisors and technology.
“With the U.S. IPO pipeline full and primed for companies to go public in the fourth quarter and beyond, it’s important for management to understand the true cost of not only being a public company, but also consider the value a good management team can provide especially in volatile markets,” said Jacqueline Kelley, Americas IPO Leader for Ernst & Young LLP’s Strategic Growth Markets practice.
“Never before has it been more imperative for public companies to demonstrate management credibility as they face higher scrutiny from both investors and regulators.”
Management: Every company that provided information about management compensation indicated that it had increased compensation in contemplation of going public, whether through salary, bonus or stock options.
Most compensation increases were extended to the CEO, CFO and others in the finance function. 23% of companies had an in-house investor relations executive, and 50% had in-house counsel. On average, companies spent an additional $1.5M annually on salaries to management and others as a new public company.
Board: 82 percent of companies had either added new members to their Boards of Directors or increased director compensation prior to their IPO. 68 percent added at least one new Board member, and almost of all these companies added two or more. A similar percentage (64%) provided additional compensation to existing Boards.
Advisors: One of the more significant costs associated with IPOs are fees paid to advisors. Most companies retained at least 11 third-party advisors in connection with the IPO. All (100%) of companies surveyed retained investment bankers, attorneys, auditors and stock exchanges.
The majority of companies engaged a printer (96%), D&O insurance carrier (92%), stock transfer agent (84%), SOX 404 consultant (76%), compensation advisor (72%), investor relations firm (68%) and tax advisor (60%). Some companies also hired a road show consultant (40%), a compensation advisor to the board (28%) and an internal audit advisor (12%).
On average, the companies surveyed spent $13 million in one-time advisory costs associated with executing the IPO. Companies spent an additional $1 million annually on various recurring advisory costs as a new public company.
Friday, October 21st, 2011
Chicago-based Groupon, the leader in the online daily deal space, says in regulatory documents filed with the U.S. Securities and Exchange Commission that it plans to raise up to $540 million in an initial public offering of stock, less than the $750 million it said it planned to raise in a June filing.
Groupon said it plans to sell 30 million shares at between $16 and $18 a share, which would raise from $480 million to $540 million.
Groupon, which reported 143 million subscribers in Q3, up from 116 million in the previous quarter, had 30 million customers at the end of September – meaning subscribers who bought at least one Groupon deal. Repeat customers rose to 16 million, up from 12 million.
It also saw increased revenue, netting $430 million, up 10 percent from the previous quarter.
Nevertheless, it is still losing money, although at a decreasing rate. The filing said it lost only $21 million in Q3, compared wiht $52 million in Q2.
PEHub has the numbers.
CouponCabin nabs $54M financing
In other online deal news, CouponCabin raised a fat $54 million in a round led by JMI Equity. The Whitling, IN-based firm, founded in 2003, verifies whether its coupons work and if they don’t offers users a $25 gift card.
CouponCabin founder and CEO Scott Kluth said, “Among other initiatives, this investment will enable us to grow our local, grocery and printable coupon offerings, making us the deepest and broadest consumer destination for coupons on the web. This investment will also help us better engage with more than one million fans on Facebook.”
The company has offered more than 100,000 deals from 3, 500 stores.
BuyWithMe layoffs due to shrinking markets
BuyWithMe, the third larges daily deals site online, slashed more than half its staff Thursday, a move COO David Wolfe told VentureBeat is due to the increasingly hostile capital market for daily deal sites. The company failed in its attempt to raise new money at a valuation of $500 million.
Tuesday, October 11th, 2011
If you think there’s trouble in Dealville, think again. A survey by Borrell Associates and Presslaff Interactive of nearly 40,000 consumers indicates they not only love the deals, but they’re also eager to sign up for more.
And a simultaneous survey of more than 700 local advertisers shows that deals are driving a significant amount of new business as well as repeat business from those new customers.
“The buzz lately about ‘deals’ being burned out appears to be a bit off base,” said Gordon Borrell, CEO of Borrell Associates, which conducted the survey in August and September with Presslaff Interactive.
“The headlines about these programs putting advertisers at risk might just be a reflection of some businesses being unprepared or making bad deals. The survey indicates that a significant percentage of advertisers are seeing business they ordinarily don’t get, and that there’s a lot of growth potential.”
Consumer love deals
The survey offers insights into what consumers and advertisers are thinking about this explosive marketing phenomenon. While the research shows that consumers overwhelmingly love deals, the response from advertisers is more tempered. “Advertisers want more than they’re getting with ‘deals,’“ said Ruth Presslaff, president of Presslaff Interactive.
The survey was launched through local media companies across the U.S., polling consumers who frequented local media websites and small and medium-sized businesses (SMBs) who advertise or participate in deals and coupons programs. It ran Aug. 1 through Sept. 9 and polled 39,040 consumers and 729 advertisers.
Among the findings:
• 91% of the consumers said they’re likely to register for other deals programs.
• 44% have signed up for four or more email lists.
• 81% of advertiser respondents have not yet participated in a deals program
• Of those advertisers who have, the average deal generated 191 sales
• 45% of the sales generated from deals come from new customers, and 22% of them become repeat customers.
“That last bullet point need underscoring,” Presslaff said. “If the average deal means 191 redemptions, that means each deal brings 20 new customers to a business. If one customer means $500 in annual sales to a dress shop or restaurant, that’s $10,000 in brand-new business for every deal launched. When advertisers figure this out, you may see a lot of bandwagon-chasing among that other 81% who haven’t tried out deals yet.”
The survey also asked questions about the frequency with which consumers preferred to see deals (answer: weekly, not daily), the most popular deals and coupons programs used, the types of business establishments most likely to participate in such programs, and the reasons advertisers and consumers participate.
To join the webinar or see full findings, see: http://www.borrellassociates.com/
For other perspectives on deal sites see:
Deal sites affect buying decisions
Deal sites growing in popularity, untapped opportunities
What the deal with daily deals? (infographic)
Monday, October 10th, 2011
By Allan Maurer
Zack Urlocker, COO, Zendesk
When Groupon signed up with San Francisco-based Zendesk, which sells a web-based help desk service, it employed only 10 people. Today, the company still uses Zendesk and has 2,000 people using it now in a dozen different countries. Groupon is only one of the high profile online clients using Zendesk.
Others include Hulu.com, the blogging service Tumblr, and the file sharing service, Dropbox. Clients also include Sony Music, Open Table, Sears, and Adobe.
The company was founded in Copenhagen by three software industry veterans in 2007. The 120 employee company has global offices and boasts 4X growth from 2009 to 2010.
The venture-backed company raised capital from Charles River Capital, Matrix, and Benchmark Capital.
Zendesk COO Zack Urlocker tells us the cloud-based service, which costs from $9.99 a month for a starter program up to $99 per agent for the Enterprise version (with annual discounts available), solves a number of help desk problems for its clients.
“We’ve all had that help desk experience where they tell you that’s a different team and you have to tell your story all over again.” Can you think of a few times that’s happened to you? I certainly can.
Zendesk eliminates that problem by making sure each successive agent all of the caller’s information.
It also lets agents handle service requests through multiple channels, such as email or a portal (such as Tumblr’s). It has voice capabilities for online service chat.
It tracks a fair amount of data and includes 20 built-in reports and dashboards that provide analytics. Those include the ability to see when queries are coming in – hours, days, months.
Like many types of software once only available to Enterprise sized businesses due to their cost, making Zendesk available in the cloud is what makes it more affordable to businesses of all sizes.
“Customer experience software used to be expensive,” admits Urlocker. “It required six months to implement and cost half a million. We’ve made this affordable to smaller companies. Some of those might grow into a Groupon or an Open Table, but everyone should be able to get good service.”