Jason Rewse-Davies, managing director, DealMonster.co.uk, Johnston Press PLC
Almost since their inception, newspapers have had a pivotal role in supporting local consumers and advertisers. We have relied on newspapers for decades to not only deliver the day’s local, national, and international news, but also to tell us about local retailers in the form of advertising and to bring us popular coupons. These coupons provide value to consumers via fair discounts, and to local businesses by offering a business growth opportunity.
With the development of the Internet, newspapers have continued to face growing competition for readers’ attention and advertising pounds. Now with the proliferation of daily deal and group buying sites like Groupon and Living Social changing the way some people buy some services and experiences, newspapers are reevaluating their marketing, couponing, and customer engagement strategies to help maintain relevance.
DealMonster.co.uk powers deals for Johnston Press, and we decided to take a different tack regarding vouchers—one that is good for us, as well as for consumers and local businesses. We are adopting a “multi-local” approach. Instead of competing on a national level with giants such as Groupon or KGB Deals, we are working closely with local merchants and leveraging all the things a newspaper is able to offer. This includes multiple marketing vehicles such as display ads and all varieties of online and offline marketing programs.
We have adopted a share-the-wealth philosophy and are using a new type of “white label” marketing platform from NimbleCommerce that we can deploy under our own brand. This allows us to support daily deals, traditional vouchers, promotions, customer relationship management, loyalty programs, directory listings, and even real-time sales management. This allows us to forge ongoing relationships directly with consumers and new relationships with local merchants. By knowing the customers’ preferences and habits, we can become smarter each time we deliver a daily deal or email offer. We can become more meaningful and relevant to the local consumers, making it more likely that they will respond, and can also help merchants better cater to their clientele and engender repeat business. We are finding that many of our merchant relationships are either new or lapsed, leading to new revenue as opposed to simply replacement income from an existing revenue line.
In practice, that might mean that the Smiths frequent a local sushi restaurant monthly. With our new marketing platform with deals as the foundation, we could offer them a discount or promotion that, for example, offers them a deeper discount if they come in twice monthly to help build more repeat business for the local merchant. By maintaining a local approach, we can benefit everyone involved.
The first-generation daily deal sites such as Groupon took a large percentage of a fixed margin. But Daily Deals 2.0, which we are helping to build in the UK, is adopting a share-the-wealth philosophy that uses performance-based marketing to fuel a more viable, long-term approach. With a performance-based platform like the one we have decided to employ, value is split fairly between DealMonster.co.uk, the customer, and merchants, so the model is much more viable over the long haul for everyone involved.
We have just begun with this new model, so stay tuned, but the early results are encouraging. Already, 11% of the DealMonster.co.uk database has bought a deal since launch, with the percentages rising each month. Of real interest is a repeat buyer rate of 35%, with one of our most established markets having a 47% repeat rate in February. In essence, we are seeing great engagement and loyalty from the customer base, stimulated in part by the easy to use and targeted database promotional tools available within the NimbleCommerce platform. We also feel that the continual focus on great local deals across a range of experiences versus the broader regional/national deals being offered by our main competitors is helping us build differentiation within an incredibly competitive UK landscape.
It’s worth noting that email remains the primary sales channel for DealMonster.co.uk, with a little over 50% of all sales coming through the email channel and the remainder coming through to us from more direct channels, including social media. This strongly suggests that consistent media support across the wider Johnston Press media asset base is playing an important role in business growth, which provides a point of differentiation for DealMonster.co.uk when negotiating with merchants. DealMonster.co.uk is able to confidently offer comparable market reach to the main national players in chosen markets through effective deployment of our multi-channel approach of email, newspaper website, and the physical newspaper.
At Johnston Press and DealMonster.co.uk, we recognise the need to offer value to readers and to build new revenue streams. We decided to add vouchers as just one element of the marketing mix that leverages our strong brands in the UK and follows a white-label driven model that is gaining substantial ground among US publishers – one that delivers great value for readers, supports local merchants, and, as we are experiencing firsthand, brings value to all parties involved.
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