Today marks the official launch of Boston-based deals start-up Privy, which is hoping to change the way small businesses use daily deals by giving them more control over distribution and promotion. The company allows SMBs to create and manage their offers, and helps them market through the business’s online networks — to Facebook fans, Twitter followers, and visitors to their website. Privy will also allow a small business to access contact information of deal downloads, track deals they set-up and view analytics to adjust their approach.
Founder Ben Jabbawy said that the problem with the current daily deals models is that they worry more about the consumer’s experience than how the business fares. He says Privy is “flipping that model on its head entirely.”
“We’re providing a way for the the businesses to create, deploy, and track offers that work for their business,” Jabbawy said. “Businesses that are using Privy to run promotions are focused on targeting quality consumers that have a demonstrated interest in their business first, and the promotions second.”
If Privy can succeed in its goal of helping businesses gain customer loyalty through these “quality consumers” then they have a good shot at becoming a real competitor in the daily deals market. Building loyalty is increasingly an aim for major players like Groupon, but there is still a sense that many deal buyers are “one and done.” If a business is able to target its own networks, which are full of potential or actual costumers, it could make conversion and loyalty much easier.
Small businesses need to strike a balance between attracting consumers and helping their own business and Jabbawy said that Privy is providing “a simple way to satisfy consumer expectations in ways that make financial sense for the business.”
This “financial sense” is a play at making the promotions model more affordable. While daily deals help businesses through exposure and a quick influx of customers, many lose money through the deal, which affects their profits. With Privy, there is no monthly fee and only a 15 percent transaction fee, compared to Groupon’s 50 percent.
The daily deals industry has entered an interesting phase, as consolidation shakes some of the small players out of the market, and major players like Groupon and Living Social adjust their models to put more emphasis on customer loyalty and retention for small businesses. Privy’s model is a sign of the market’s changing landscape. No one has been able to figure out exactly where the focus should be, but allowing businesses to take the controls and use promotions for long-term goals instead of instant income may be the future for daily deals.
Isa Jones is an intern at Street Fight.