As pure-play daily deals sites struggle to remain attractive to local merchants, a new model for offers is beginning to emerge. Rather than giving blanket discounts on general merchandise — a hallmark of the original Groupon deals — brand advertisers are increasingly opting to use performance-based offers as a way to drive traffic without necessarily hurting the bottom line.
Performance-based offers give brands of all sizes a way to liquidate excess inventory, fill seats at the last minute, and drive foot traffic to physical locations. They’re easier for SMBs to track than display and CPM-based advertising, and they tend to have a “measurable impact” on sales. By 2015, SMBs are expected to spend $4.6 billion on performance-based commerce, according to a forecast by BIA/Kelsey.
Here are six tools that merchants can use to create performance-based marketing offers.
1. Qwikon: Improve yield with SMS offers.
Qwikon is a platform that businesses can use to reach customers in real-time. By text messaging their customers special offers or promotions with limited redemption periods, merchants can drive traffic at opportune times. Businesses maintain complete control over the terms of any deals they offer, with no minimum discounts, commissions, or revenue-sharing. Qwikon says its deals drive same-day response rates from 5% to 40%, and 97% of text messages are read by consumers within minutes of being sent. Merchants are charged based on the number of texts they send, with monthly fees ranging from $49 to $249.
2. Savored: Fill empty tables after the dinner rush.
Variable pricing is a hot topic within the restaurant industry, as marketers debate the merits of offering discounts on tables before and after the dinnertime rush. Savored is a platform that lets restaurants do just that, providing tools to help with yield management for restaurants of all sizes. Acquired by Groupon in September 2012, Savored lets restaurants offer discounts to diners who make reservations during slow periods (like before 6 p.m. or after 9 p.m.). Restaurants can also offer last-minute discounts as a way to fill seats when diners cancel existing reservations, as well. Savored takes a “small fee” from restaurants when diners make reservations through the platform.
3. Sailthru: Deliver unique offers on a case-by-case basis.
Tailored offers are known for delivering a higher ROI for merchants than blanket discounts. Sailthru is a marketing platform that takes deal tailoring to the extreme, providing e-commerce businesses and other brands with a way to send custom offers based on each customer’s unique behaviors and preferences. When they collect data on consumer behavior, Sailthru clients are able to connect with customers who are most likely to be interested in the deals they’re offering. Sailthru can be used for targeted emails, SMS messages, and in-app communication. Sailthru charges clients a fixed price per-user, rather than charging based on the number of emails sent.
4. Bloomspot: Guarantee sales before launching new services.
Launching a new product or service is always a risky proposition. Bloomspot has found a way to decrease the risk, by partnering with merchants to pre-sell new services and products to subscribers and offering to “cover the difference” if a merchant’s deal isn’t profitable. Merchants benefit from knowing they won’t be empty on the day their new services launch, and customers benefit from getting those services or products at a steep discount. The company’s Encore loyalty program tracks the spending of customers, making it easy for businesses to gauge the effectiveness of their Bloomspot campaigns. Bloomspot charges a commission based on the number of offers a merchant sells.
5. Leloca: Order on-demand customers when your restaurant is slow.
Like Savored, Leloca is a yield management platform that gives restaurants a way to bring in customers immediately when they’ve got empty tables to fill. Participating restaurants log-in to the Leloca platform and enter the parameters of the customers they’re looking for (for example: people who work in offices nearby, or people who live in the next town over), and entice those customers to visit immediately by offering steep discounts with limited redemption periods. Leloca charges businesses a “metered fee” that’s around $1 per customer, and stays “entirely out” of the transaction process.
6. Dealflicks: Fill unsold theater seats.
Dealflicks is a platform that independent theaters can use to fill more seats, using the same demand-based pricing structure as travel sites like Hotwire and Priceline. Theater owners offer last-minute discounts on tickets to shows they don’t expect to sell out. While the discounts are steep — up to 60%-off tickets, in some cases — a theater owner’s operating costs don’t increase based on the number of people watching a particular film, which means the theater isn’t losing any money when it offers discounts on tickets that would otherwise go unsold. Dealflicks takes a 10% cut off of tickets sold through its platform.
Know of other platforms that offer performance-based offers? Leave a description in the comments.
Stephanie Miles is an associate editor at Street Fight.