Bare Deal likes to describe its coupon service as “Groupon meets Netflix.” Its founders are a couple of Northwestern grads who mail (yes, mail) coupons to consumers who’ve asked for them, requiring payment only when consumers use the coupons.
Bare Deal co-founder, Glen Andrianov, explains through an example. ”This week, we are featuring the company, Chocolate for Your Body. Anybody who signed up for Bare Deal is able to select this specific deal on our website. A scratch off-card for Chocolate for Your Body is then sent to the person’s mailing address.”
Put another way, this is the process:
- The consumer hears about the service via Twitter, Facebook, word of mouth, or opt-in email and goes to the Bare Deal website, and “signs up.”
- The consumer who wants to explore a deal, registers for that deal.
- Bare Deal digitally prints and mails the consumer a scratch-off coupon featuring a 40- to 100-percent discount, branded with the business’ info.
- When ready, the consumer takes that coupon to the business and redeems it.
Because the recipient asked for the coupon, the open-rate is high. But there’s another – some might say better – reason to open that envelope immediately. Consumers don’t know precisely how big their discounts will be until they scratch-off in the privacy of their home. The discount could be a healthy 40%, or the discount could range up to 100%.
Andrianov says consumers have fun with the coupons. “Instead of a product focused only on savings (Groupon and competitors), our scratch cards provide variable savings, which create excitement – consumers are ‘winning’ a discount.”
Couponing is huge in the Windy City (as this Chicago Tribune article notes) so there’s plenty of competition. But coupons enjoy impressive marketing acceptance, too. So how does Bare Deal differentiate and market its coupons? Andrianov says the company set out to create a service people would love and drives traffic to the website mainly through word of mouth and social media (Facebook and Twitter). “Also, members pay businesses directly, which helps foster loyalty between consumer and their business.”
Lynford Morton, owner of PhotoTour DC, a company that teaches photography on walking tours around Washington, DC, would concur that business access to consumers is critical, but also missing in most coupon arrangements. Morton, who has a lot of experience with coupon marketers, says, “I get pitched by these coupon companies all the time. They all claim some novel differentiator…which really turns out to be yawn-inducing. Every now and then I get a couple smart ones who want to talk to me about where my pain points might be with the daily deals of the world and how they might address them. Others bring me solutions to problems I don’t have. If I understand the Bare Deal approach correctly, this business solves one huge problem by letting you communicate with your customers. To know 600 people bought your product, but you can’t communicate with any of them is nuts. Giving a business owner direct access is huge.”
Andrianov agrees. “Businesses prefer us over competitors because they are able to put their brand identity on a physical product, compared to a black-and-white printed piece of paper with no brand identity.”
Customers must love the pay-as-you-go arrangement, too? I mean who doesn’t have at least a few coupons already paid for, but unredeemed sitting in a folder somewhere? Guilt! Angst! Pressure! Ah… relief!
The delivery of branded, redeemable scratch-offs can happen only one way: via direct mail. “Because we provide a physical product that can’t be printed on a computer, we use direct mail .. This process allows us to send scratch cards only to members who are interested in a specific deal … If a member does not select a deal, they will not receive anything in the mail.”
In short, Bare Deal’s innovative merger of a pay-when-you-use-it-only coupon with the thrill of a strike-it-rich scratch-off should add up to a model with promise.
As Netflix already proved, the U.S. mail has its advantages. In fact, some people would argue that the U.S. Postal Service made Netflix successful. So, yes, it’s good to see smart marketers still working the direct mail angle.