1. Waterfall
Industry*
Insights
Kane
Russell,
VP
of
Marke,ng
Waterfall
*
Daily
Deals
And
Mobile
-­‐
Engagement
Explained

2. Waterfall
Mobile
and
the
Msgme
Pla4orm
Waterfall
Mobile
๏ Founded
August
2005
๏ Offices
in
SFO
(HQ),
NYC
&
Aus=n
๏ Backed
by
Vista
Equity
Partners
๏ Cross-­‐channel
mobile
&
social
CRM
via
SMS,
MMS,
QR
Codes,
IVR,
Facebook
&
TwiRer
๏ Free
trial:
www.waterfall.com
๏ API
suite:
apidocs.waterfall.com
๏ Custom
applica=on
development
๏ Short
code
provisioning,
cer=fica=on
&
audit
management

3. ๏ Daily
deals
-­‐
“hot”
or
“not?”
๏ Economics
-­‐
how
daily
deals
create
value
๏ Success
factors
-­‐
how
daily
deals
can
stay
“hot”
๏ Solu,on
-­‐
mobile
marke,ng
CRM
๏ Implementa,on
-­‐
mobile
and
daily
deals
๏ Key
takeaways
Objec8ves

4. Daily
Deals
-­‐
“Hot”
All
Summer/Fall
2011
Headlines

5. Daily
Deals
-­‐
“Not”
All
Summer/Fall
2011
Headlines

6. What’s
Affec8ng
Revenue?
$0
$15
$30
$45
$60
$75
$90
Jan
‘10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10 1/11 Feb
‘11
$62
$89
$81
$76
$55
$46
$53
$29$31
$26
$21$19
$14
$11
Millions
of
Dollars
Month/Year
Source:
Techcrunch
2010
-­‐
2011
Groupon
Revenue
EsGmates

7. Is
Deal
Fa8gue
A
Factor?
Subscribed
to
daily
deals
Subscribed
to
Groupon
&
Living
Social
Only
buy
from
Groupon
Subscribed
to
at
least
3
providers
Been
subscribed
more
than
1
year
Now
opening
fewer
or
none
of
offers
Will
buy
fewer
deals
than
have
in
past 68%
74%
20%
36%
41%
72%
86%
Source:
Local
Offer
Network
EsAmates
Daily
Deals
Consumer
Survey
Data
(n=943)

8. Daily
Deals
Industry
Revenue
Projec8ons
Source:
Local
Offer
Network
EsAmates
2010 2011
$2.67
$1.12
US
Group
Buying/Daily
Deals
Market
INDUSTRY
REVENUE
(GROSS)
in
billions
of
dollars

9. Daily
Deals
Industry
Offers
Growth
Source:
Local
Offer
Network
EsAmates
10,000
20,000
30,000
40,000
2010
Q1 2010
Q2 2010
Q3 2010
Q4 2011
Q1
(E)
6,895
14,462
19,676
22,163
39,993
US
Group
Buying/Daily
Deals
Market
TOTAL
OFFERS
PUBLISHED

10. Economics
of
Daily
Deals
Consumers
Merchants
Daily
Deals
Service
Providers
Before
Deal
Day
During
A_er

11. Before
Deal
Day
๏ Daily
deal
value:
amount
consumer
would
pay
normally
๏ Daily
deal
price:
amount
consumer
pays
for
daily
deal
๏ Daily
deals
sold:
number
of
daily
deals
purchased
by
consumers
๏ Revenue
split:
agreed
upon
provider
and
merchant
revenue
share
๏ Payment
terms:
Ome
unOl
provider
pays
merchant
๏ Average
Gcket:
the
normal
purchase
amount
at
merchant
establishment

12. Deal
Day
๏ Merchant
revenue:
amount
of
revenue
generated
for
merchant
๏ Provider
revenue:
amount
of
revenue
generated
for
provider
๏ RedempGon
rate:
percent
of
customers
that
purchase
and
use
daily
deal
๏ New
customers
%:
percentage
of
new
customers
for
merchant
from
deal
๏ Credit
card
processing:
charge
by
credit
card
companies
for
transacOons
๏ COGS:
cost
to
the
merchant
of
good
sold
๏ Other
merchant
costs:
cost
to
the
merchant
of
doing
business
๏ Consumer
spend:
consumers
may
spend
more/less
than
daily
deal
value

13. AMer
Deal
Day
๏ “Yelp”
effect:
percepOon
of
merchant
aQer
daily
deal
promoOon
๏ Repeat
customers:
number
of
consumers
who
return
to
merchant
๏ “Deal
hunter”
effect:
number
of
consumers
willing
to
buy
at
full
price

14. An
Example
Daily
Deal
Promo8on
According
to
terms
from
Techcrunch
“Stop
The
Hate,”
hgp://tcrn.ch/nIWiQ:

15. So
How
Can
This
Work
For
A
Merchant?
Unfortunately,
not
as
simple
as
“merchants
should
negoGate
beger”:

16. Daily
Deals
Industry
Factors
Low
margin
businesses
face
much
greater
risks
running
a
daily
deal:

17. Daily
Deals
Execu8on
Factors
Daily
deals
can
be
profitable
if
they
agract
new
and
repeat
business:

18. PuTng
It
All
Together
Higher
margin
business
+
negoGate
terms
+
execute
well:

19. Daily
Deals
Success
Factors
๏ For
Merchants
-­‐ NegoOate
beRer
terms
with
deal
providers
-­‐ Make
sure
daily
deals
is
right
for
your
business
๏ For
Merchants
&
Providers
-­‐ ARract
new
customers
with
daily
deals
-­‐ Make
sure
new
customers
return
-­‐ Recruit
these
new
customers
as
brand
ambassadors

20. Mobile
Marke8ng
CRM
1)
Build
a
mobile
subscriber
database
2)
MoneGze
database
through
interacGve
mobile
communicaGon
campaigns
IVR

21. Time
To
Invest
In
Mobile
Is
Now
Source:
Forrester
Which
describes
your
mobile
strategy?

22. Time
To
Invest
In
Mobile
Is
Now
Source:
Forrester
What
kind
of
investment
in
mobile
do
you
foresee
in
2011?

23. Time
To
Invest
In
Mobile
Is
Now
Source:
Forrester
What
do
you
feel
are
top
uses
for
mobile?

24. Mobile
and
Daily
Deals
๏ ABract
new
customers
with
daily
deals
Vet
daily
deal
sign
ups
against
acGve
subscriber
list
NoGfy
current
customers
of
alternaGve
promoGons
๏ Make
sure
new
customers
return
Capture
mobile
subscribers
upon
deal
sign
up
Capture
mobile
subscribers
upon
purchase
๏ Recruit
these
new
customers
as
brand
ambassadors
Run
“bring
a
friend”
campaigns
for
new
subscribers
Drive
online
brand
equity
via
interacGve
campaigns

25. Case
Study:
Gelato
Spot
Success
to
date:
๏ Had
customers
opt-­‐in
for
mobile
subscriber
list
when
they
used
daily
deal
vouchers
๏ 80%
of
these
customers
remained
on
list
aQer
three
months
๏ Mobile
coupon
pitches
geZng
highest
redempOon
rate
for
any
other
medium
Next
steps:
๏ Encourage
new
customers
to
return
with
their
friends
๏ Run
campaigns
geared
toward
brand
value
instead
of
coupon
purchases
Source:
ClickZ
MarkeAng
News

26. Key
Takeaways
For
Merchants:
๏ Perform
due
diligence
to
make
sure
daily
deal
right
for
you
๏ Drive
new
and
repeat
business
๏ Adopt
a
lifeOme
value
perspecOve
For
Daily
Deals
Providers:
๏ Not
all
revenue
is
good
revenue
๏ Encourage
merchants
to
think
beyond
the
campaign
๏ DifferenOate
brand
with
innovaOve
technology
soluOons

27. Any
Ques8ons?
For
more
informa+on
visit
www.waterfall.com
Or
contact
us
directly:
marke+ng@waterfall.com
More
industry
informa+on
available
on
our
blog
@
waterfall.com/blog/