What if the daily deal is weekly?

Sites:  DiscoverSD.com and sandiegoclubs.com
Traffic:  150,000 UV's and 630,000 page views
Daily deal brand:  DiscoverSD.com Insider Hook Up, hookup.discoversd.com
Key executive: Nadav Wilf, Co-founder and President

Overview:
(Update: This site was acquired by San Diego Union-Tribune in early 2011)  Small sites  with an interest in group deals have a realistic concern about sustaining the daily pace and organizational strain of a daily deal program. So what about a weekly deal? Of the small scale launches we looked at, one of the most interesting is DiscoverSD.com's Insider Hook Up. Technology partner Deal Current said this company "did everything right." After five weeks of a weekly "deal" the program has now expanded its formula to a two days a week, and plans on four days soon. This, in spite of having Groupon, Living Social and SignonSandiego.com - all major daily deal players, in its market. Here's how the site carefully differentiated itself, acquired great deals, established a brand and scored a profit in just 5 weeks.

The program just launched weekly in July, 2010 on the Deal Current platform.

Challenge:   DiscoverSD.co and SanDiegoClubs.com  are lifestyle sites that cater to a younger demographic and are staffed with five outside reps. The existing kinds of advertising packages included about 6 to 10 marketing products and services such as display, editorial, SEO, mobile, email and events promotions, offered at $300 to $5000 a month; the client base is lifestyle businesses such as San Diego restaurants, spas, hotels, and clubs. CEO Nadav Wilf wanted to launch highly profitablly daily deal coupons, but was concerned about resources. As a pureplay in a hyper-competitive market, this new initiative would also have to be carefully branded. 

Strategy: The launch strategy included starting with just one fantastic deal a week, using well known brands that matched DiscoverSD.com’s hip reputation. Wilf says he wanted to make sure the deal quality was good enough to produce sales  in the range of 250 to 800 vouchers per deal.

Keep in mind the equation is reach time deal quality = cash (thanks to Pat Lazure, president of World Herald Interactive for this formula), and you will quickly the see how careful planning created success:

• Creating a Unique brand: Insider Hook up 

Wilf chose to brand his daily deal as the "Insider Hook Up"  because it "hooks up" the audience with uniquely created "cool" deals such as Hard Rock Hotel staycations that other deal sites don't have. The brand is a sub-url on the main site.

• Insisting on great deals

DiscoverSD's sales team at first chose "really good brands that had never done a deal before" that tied in with its own brand and audience. In this way, the program's deals were positioned as exclusive offerings, only available to DiscoverSD.com members.  Since the site is entertainment-oriented it made sense that the offers would target entertainment consumers.  The first offers were for top San Diego restaurants, bowling alleys and top night clubs. Offers included $30 gift certificate for $10 to use on food and drink . DiscoverSD.com has found that the $10 to $15 price points at a 60% or more discount on top business have yielded the best results.

• Increasing the email list with affiliate partners

While DiscoverSD.com's mailing list is a respectable 20,000, additional affiliate relationships increased that number to 65,000 names. In this case, they tapped one of their advertising partners, DJHere, a top San Diego promotions company, who shares in the revenues from the list it has added to the mix. DealCurrent's software allows for tracking revenue share with affiliates, something not all software providers provide, so if you are interested in this model be sure to ask. 

• One sales person in charge

While some small companies view "too small' as a reason to scimp on staffing; Wilf invested in a dedicated sales person from the outset.  He says he is betting on this program growing to a multi-million dollar a year product on its own; so to create fantastic deals, investing in a full-time combination sales person/product manager made sense; the other four sales people bring focus on advertising contracts as well as leads for the Hook Up  and split the commission. 

Results:  In the first six weeks of the program about half of the deals sold more than 400 vouchers. Wilf says the first month broke even, the second was profitable and this month as of September 13th, they are already at August's revenue level. So this is a very early snapshot, but one that shows tremendous potential. 

The company has already moved to two deals a week, Health and Beauty on Mondays when their target market of weekend revelers is relaxing and primping; and back to  restaurants and entertainment on a Wednesdays as the same audience gets ready to go out and do it again. With 12 deals so far since launch, they are moving to four a week by November and and possibly daily in Q1 of 2011.

Lessons learned:  If you've read our other case study and the ten tips, the lessons learned from DiscoverSD.com are elegantly simple, but critical to making a big success out of a small launch. 

• Consider starting weekly is an option to keep deal quality high with fewer resources

• Focus on building a brand of quality deals first, not just quantity of deals 

• Use affiliates to expand the email list and reach as fast as possible

• Invest in the program - and at least one full-time staff person -  and it will be successful

Wilf sums it up: "I wanted to do it right,  and to be known for good deals and have a good brand." 

Thanks to Wilf for sharing his experience and to Deal Current for sharing Wilf. A little background on Nadav Wilf: a serial entrepreneur Wilf grew up in San Diego, studied Psyhcology at UCLA, started his first business in LA, then returned to San Diego where he founded  Matrix Media Technologies, an SEO firm, sold Matrix last year to GearyI.com.