local media insider
Case study

Four new ways to increase deal revenues

Morris Communications shares a few key initiatives to drill down for more revenues from deals

Alisa Cromer
Posted
Poppas Barbecue did not just sign up for a deal - they also wanted the media company to handle their email marketing as a service. Here's one of their new newsletters, sent for them by the Savannah Morning News digital team.
Sometimes sending to the full list - not just opt-in's - caused a deal to blow-up, as in the case of this popular seafood restaurant, in the early days of Morris Communications' daily deal program.
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Case study: Four ways to increase deal revenues
Company: Morris Communications
Markets: Savannah, Athens and Augusta, Georgia
Key Executive:
Cynthia Philpot, Product and Business
Development Consultant, Morris Publishing Group; Erika Miller, Daily Deals Program Manage

Summary
New best practices for optimizing revenue are emerging that involve further data-mining and using large lists to build smaller, more targeted ones. Here are four initiatives that leverage deal assets to obtain more revenues (see also, how to model deal growth and 'best practices' attachment at the bottom of this report).

1. $20 in deal bucks to infrequent buyers
In analyzing the email data from deals promotions, Philpot noticed that a large percentage of people who sign up for deal emails never buy. She divided this group into “engaged” – those who had at least opened and email – and “non-engaged” – those who never opened.

She created  a simple email that offered $20 in Deal Bucks via a promo code. The email was only sent to non-redeemers, in October, 2011, and a deal needed to be redeemed within two weeks (a copy of the promotional email is attached at the bottom of this report).

The email had a 16% open rate and a 2.79% click through rate. Of 13,000 people on the email list,  340 acquired the promo code and 250 of them bought one to five times in the next two weeks. At these numbers, the program broke even on the investment right way. Philpot plans to look at quarterly and annual returns on the promotion to see the full value of this kind of targeted remarketing.

Also of interest, 100 of the 250 who bought had already bought previously, using a different email address. The multiple email address phenomenon was a surprise - and somewhat of a mixed blessing. Multiple email opt-liners did buy one to five times more in the next two weeks, but how much of that cannibalized the previous email address  is unknown.

The remaining 150 redeemers, or 57% of the total who bought, were mostly people who had opened at least once. Philpot stipulates that buys from non-openers were so low that it may be time to purge the lists.

Philpot also recommends making sure that the deals  following the promotion are at least $20.


2. A VIP club with unique deals for special opted-in interests
The next initiative required surveying people who bought deals - using a giveaway such as an iPad as an incentive – to obtain information and a double opt-in for deals that people have already said they want to receive and are interested in buying. The survey has not gone out yet, but will allow users to opt-in to VIP deals for categories such as high end restaurants, every day restaurants, travel packages, salon and beauty, adult  activities, family activities and educational opportunities.


3. Extra opt-in for the merchant's own email list - and potential new revenue stream

Since most markets have already become competitive in the deal space, having something extra to give back to the merchants after the deal can be a key advantage. In this case, Philpot’s program has an extra opt-in on the deal purchasing page, in which the consumer can request to receive additional information from the merchant.The opt-in in included on the deal site after the customer clicks buy: 



As an example, Papa’s Barbeque and Seafood had only a few names on their own email list. As a result of the deal, 150 people opted-in for more information.

Additionally, the Savannah newspaper has now taken over all of Papa’s Barbeque’s email marketing, sending a series of newsletters through Savannah’s email company with a mark-up. Philpot sees email marketing as a service as a potential revenues stream, and new element of the SoLoMo packages. A great way to increase share of customer.

4. Send occasionally to the full list
Once the company has a "feel" for which deals work best, and full cooperation from the merchant, an occasional "all-mailing" to the entire list is due and can create significant revenue bumps. An example of this in Augusta was a $10 for $20 dinner at Rhinehart's Oyster Bar, a popular seafood restaurant. Even though Augusta had started with a paltry 3000 opt-ins, the full email list was 70,000, and Rhineharts was exceptionally popular. The deal grossed $56,580, and 1110 new users. Taking advantage of the opt-in program for merchant information, Rhinehart captures 3000 emails of its own. The next deal it ran with the program, capped at 4500, sold out.

Timing a few key offerings to the whole email list can hold revenues during slow months while building the list further.

Resources: Morris is currently switching its Jacksonville.com deals platform to Second Street Media which is being customized to include merchant opt-ins.

See also the attached Daily Deals Primer, Daily Deal Checklist and LMI's deals channel.

Our take

These are all solid best practices. Remarketing to infrequent buyers is a simple promotion that will add more users right away. In addition,  allowing a merchant opt-in will have long advantages in gaining "share of merchant" and provide a key competitive advantage against other deal providers.

As a checklist to be sure you are following "best practices" please see the attached summary of Matt Coen's  (Second Street Media) presentation at the SNA Deal Summit, and Philpot's promotional checklist.

As more than one local media executive has pointed out,however,  strategy is only 49% of the success equation. 51% of success comes from having the right people. Morris Communications has put together an outstanding team (in addition to Philpot, they include Erika Miller, Daily Deals Program Manager;.Marc Jenkins, Digital Media Sales Director;Tony Bernados, Corporate VP of digital media sales; Florida Times-Union; Dana Griffin, Director of Revenue Design and Development, Morris Communications; and Jodi Bell, Director of Advertising, Augusta Chronicle.

Also important is a  "deals committee" to review and push for better deals. In short, is chemistry in your deals program?

Many thanks to Cynthia Philpot, Product and Business Development Consultant, Morris DigitalWorks, for sharing these best practices with us.