Groupon, the leader in the daily deals space, filed for its initial public offering Thursday. Jere Doyle, CEO of Eversave, took some time to talk about what Groupon’s IPO means for the industry. An edited version of our conversation appears below:
What does this mean for the daily deals space?
This space has been so written about and talked about over the last year, particularly the last six months or so, I’m not sure anyone’s surprised by the decision to go public.
Anytime there’s a new industry, obviously the first one out has the advantage, as Groupon has here. But this legitimizes the daily deal market.
I do think that this marks a point in the evolution of this industry. This is all happening so fast and we’re already seeing that some of this industry has been consolidated — or not, with Google’s attempt to buy Groupon. We’re already being being approached by smaller companies to see if we’re interested in some consolidation. That happens whether or not Groupon goes public, and LivingSocial follows suit.
But there’s lot to be done in this space, a lot to flush out. Mostly we have to focus on helping to build loyalty and retention. Ultimately the winning products are the ones that don’t just acquire, but work on customer developments.
And what’s being done in that area?
Well, we’re working on better targeting. Look at banner ads, for example, there was improvement in targeting there. Now, we’re seeing certain companies developing loyalty programs. Eversave has two different programs that help with loyalty, to get in touch with customers and reward consumers.
Daily deals is a phenomenal product, but the one black eye is that it’s a one and done. There are no regulars.
The winners will be those that figure out to get people to come back and become life-long customers with value. That’s all happening right now.
Groupon revealed that it’s losing money; should investors be concerned about that?
That’s common, in this business. When it comes to investing in new business, as fast as these companies are ramping, you have to make wise investments and show you have a payoff down the road.
I’m not surprised to see Groupon is losing money, it’s making investments in core asset, its subscriber base.
Prominent companies such as Google are also jumping into this space. What does that mean for companies like Groupon, LivingSocial and Eversave?
This industry is much harder than people realize. It has a ton of moving parts and you really have to be a specialized company to do it right.
The mass scale of a Google/Facebook/Amazon gives some them advantages, but the question is if they have the ability to focus like a laser on this product.
It’s an easy business to get in to, but difficult to scale. It’s really three businesses, a retail, marketing and technology business all in one.
In 25 years of marketing, I’ve never seen work so well if done right, growth that works well for all parties, if done properly.
It’s changing the way the local merchants spend advertising dollars. I’ve never had that many merchants come up to say that what you’re doing is incredible. I’ve never had consumers stop me on the street before. You never had people stop you to say that you had a really great banner ad or a coupon for one dollar off meatballs at the grocery store.
How will the experiments into mobile deals look going forward?
For that to work, merchants have to use a self-serve pool. And you’ll need to have a lot of offers for it to work. Getting to scale is important, because if daily deals companies don’t do that, they’re not going to have consumers who are hooked into checking all the time.
If I’m in Georgetown and I look up deals around me and there’s only one when I check, I’m not going to check again.
The question is whether merchants know how to do it, and do they have the time to do that? When you’re running a business, the scarcest resource is time.