It’s a deal
Kate Altmaier liked the idea of Groupon when a friend recommended it to her.
She was far from the only person to like the idea, and the company she works for, Webspec Design LLC, is far from the only organization to emulate it. Now, a pair of Des Moines start-ups are putting their own spin on the suddenly popular idea of a third-party group coupon website.
Altmaier is the director of business development for Webspec Design, which launched its local service, DSM Daily, for customers to sign up in February, and plans on launching live deals by mid-April.
Another local service founded by Ben Cox, Steve Scheidecker and Dan Shipton, called TownPoints, is scheduled to launch during the first week of April, as a different type of coupon service that its founders think will break the mold.
Both businesses believe their services will stand out amid a growing third-party coupon crowd.
“People love coupons,” Altmaier said. “The great thing about it is we won’t all be running the same deals at the same times. I think there’s a possibility for different places to exist.”
The idea is one that makes sense, she said: provide a similar service at a smaller, local scale. Her selling point on why DSM Daily will work when national sites such as Groupon, LivingSocial Inc. and Travelzoo Inc.’s Local Deals already operate in the region is that a locally run company will be able to work well with local businesses.
TownPoints’ approach is to focus on the business, said co-founder Ben Cox, by running weekly deals instead of daily deals, therefore giving the participating business a week of exposure.
“Instead of doing a daily deal, we’re going to do a weeklong promotion for our business,” Cox said. “They’re going to get a really intense weeklong promotion, which will spill over into other social media spheres of Twitter and Facebook and Foursquare.”
Big idea, local scale
The idea behind DSM Daily, and the reason its founders are confident it will work, is that the deals will be completely local. Altmaier said there are already seven businesses with signed deals and another 30 to 40 with which she is working to set up deals. The service plans to have a new deal every day.
Being a local company will also allow for local involvement. The company’s “Deal Mobile” can be seen around town handing out T-shirts at events such as Des Moines Buccaneers and Iowa Energy games, and was even in the St. Patrick’s Day parade.
The service is a product of Webspec Design and owner Jeremiah Terhark, who hired Altmaier to direct development of that part of the business.
Beyond driving around in the Deal Mobile, a vinyl-wrapped renovated Chevrolet delivery van painted green and orange with the words “DSM Daily” on the side, Altmaier has focused on getting a subscriber base before actually launching a deal. Her goal is to have around 10,000 customers signed up to receive deals, and she has already gotten the word out through social media, including a 72-hour “tell your friends” campaign in mid-March that featured a $1,000 prepaid gift card giveaway through Liberty Bank. The service already has between 5,000 and 6,000 customers signed up, and expects to reach the 10,000 goal with a push before the launch.
“The focus is to grow that, develop that (customer base), so that when we go to area businesses, we can say, ‘We’ve got 10,000 people that are hungry for these deals,’” Altmaier said.
Being a local company will help DSM Daily compete with national services doing business in Des Moines, she said.
“I think there will be a lot of areas we’ll be able to do better (than Groupon),” Altmaier said. “We know what businesses are doing well. If a business does a face-lift, we know that because we’re on the ground here. We know what Drake (University) students like; we’ve got them working here.”
DSM Daily deals will typically be at least 50 percent off, though Altmaier said the terms of the deal will generally benefit the businesses. DSM Daily only plans to take 25 to 30 percent of sales, as opposed to other services that take around 50 percent.
Building up the brand
The three TownPoints founders had the idea for their service while watching Groupon and other sites take off.
The aspect those services lack, they say, is brand recognition. Though the sites tout the ability to provide long-term marketing gains for the businesses they partner with, Cox and company reasoned that consumers would get bogged down by having a different deal every day from multiple sources.
“On the bigger group-buying websites that are out now, they are promoting themselves and they’re giving you this great deal, where we want to take a step back from that and promote the actual businesses that you’re going to go to,” Cox said. “We want to say, ‘Hey, look at this business. Look at all the great things they do right here in your community.’”
“They don’t build any kind of long-term, top-of-mind awareness for a brand,” Scheidecker said. He said what will set TownPoints apart is “really fostering those long-term relationships between the brand and the consumer – not between the consumer and the website.”
Part of that includes running one company’s deal for a whole week, solely promoting that company through social media websites and a limited number of emails. Another key element is providing a “frequent flier” points system, allowing customers to redeem points for using the service, referring friends to it or even doing something as simple as liking a participating business on Facebook. The process is being fine-tuned, but points could go toward anything from a free drink or appetizer to a private dinner with the owner of a restaurant – anything to help business-customer relations.
Businesses should expect to run similar deals as other sites, generally around a 50 percent discount.
The founders said they have contracts in place with “a couple months’ worth” of businesses. The service aims for a mix of different types of businesses, but will focus on unique places.
“We want the businesses that we want people to know about,” Scheidecker said. “Places that we all visit frequently and places that are often hidden gems. There’s a lot of them in Des Moines that people don’t know about. With 52 businesses (per year), it really allows us to pick the greatest merchants in the area.”
Shipton called Des Moines a starting point in order to tweak the concept, but the founders expect to expand the service to other cities in Iowa and the Midwest in the near future, including Omaha, Springfield, Mo., and Kansas City.