With destination sites, white-label providers and aggregators all crowding into the deal-a-day space, the struggle to differentiate and scale is complex. DealOn, which operates its own group buying sites in 16 markets and also offers white-label branding, thinks it has uncovered two ways to rise above the noise: verticalization and an offer network.
CEO Rich Razgaitis told BIA/Kelsey that DealOn has developed an early “lock” in restaurants, one of the most popular deal verticals. As Zagat’s white-label solution, DealOn powers deal sourcing and post-transaction processing for Zagat Exclusives (heady savings on premium, Zagat-rated local restaurants) while also integrating these offers on its own sites. A similar partnership with Nation’s Restaurant News gives the 70,000 restaurant SMBs represented by the portal access to DealOn’s suite of services. DealOn isn’t alone in the restaurant realm, however, with OpenTable having hatched a successful deals platform. Food-and-drink heavy reviews sites such as Yelp must also be contended with.
Once deals are developed, they can be fed across DealOn’s OfferEx network. This exchange relies on an open API to connect deal suppliers with resellers and distributors. Providers achieve greater reach on their deals, while publishers with existing content management systems can integrate deals that fit their markets and audience demographics. Razgaitis noted that this could be most appealing to publishers that “want the ability to sell into the system [and capture consumer on their sites], but not be limited by it.” Tippr and Local Offer Network are also players in deal distribution.
To date, more than 20 partners are integrating deals through OfferEx. Most offers are supplied by DealOn, but the company is hoping to enlist more outside deal sites.
DealOn has a feet-on-the-street sales force totaling 20 (an average of one per market), backed by telesales. The company believes that personal sales are critical at this still-early stage in order to better educate SMBs on the value of participating. Down the road, however, Razgaitis envisions a self-service marketplace where merchants can self-select creative, geography and timing and then serve up their deals for distribution across the network.