The daily deal model has seen better days, with the market shrinking and consolidating, and the market leader's share price in the can. But one startup hopes that it differentiate its deal platform from the rest by offering consumers and merchants a deeper package that includes consumer-driven deals (CDDs), events and ticketing, while allowing people to give back to their favorite charities and non-profits.
The consumer-driven (or reverse) deal has been tried before without mind-blowing success, but SoRewarding thinks its holistic approach will have appeal to local businesses. We first covered the company last year, when it was just getting started under the name SoBiz10. Today, the company is officially announcing that it has relaunched as SoRewarding, sold 51 percent of its business to CardFree and is launching an events feature that brings a little Eventbrite to its suped-up reverse Groupon model.
The Colorado-based startup started out with the goal of turning the reverse deal screw further by reducing the time it takes consumers to propose (and merchants to approve) a deal by automating the whole process. Consumers can propose deals as a group or as an individual at their favorite local merchant, who are then notified of the deal and can view, nix or accept via automated application within a 24-hour time frame.
If it's approved, it goes live in SoRewarding's marketplace and members are notified. While it might sound like the tyranny of the consumer, SoRewarding thinks it can offset the seeming immediacy of this approach by giving merchants the opportunity to generate new and retain loyal customers through a larger revenue share — a set rate of 75 percent. (25 percent is the general norm for other coupon sites.)
On the merchant side, all businesses have to do to sign is create a profile to become a member. Once they've done so, they can add fine print, edit the deal, add banking info, and presto. The other cool part of this is that SoRewarding is in the process of building a network of non-profits, which consumers can choose to give a portion of deal profit to for each CDD.
The startup is currently working with about 30 non-profits (with more being added each day), including names like Make A Wish, Big Brothers/Big Sisters, etc. Obviously, the company thinks that this charitable aspect adds to its network and provides some additional meaning to the typical coupon-clipping nature of daily deals. Plus, it believes that this approach is a great way to reduce sales overhead and create a more cost-effective model for merchants. So far, the company has successfully launched deals with independent and large brands, like Whole Foods.
Today, the company is unveiling its new "Events" feature, which incorporates events into its reverse deal platform, allowing users to create an event at a local merchant and request a group deal for each of the attendees. For example, an event on SoRewarding for a birthday party at a local sushi restaurant, while requesting a deal for each person attending. Merchants receive an email notification and has 24-hours to accept, reject or counter-offer. If the deal is accepted, invitations are automatically sent out and attendees can RSVP and purchase the deal from the event page.
Events can be made public or private, with public events appearing on SoRewarding's homepage for anyone to attend. The idea is to create a community where people can create events, find events, receive a discount and give back to the community while they do it.
The startup has also sold 51 percent of its business to CardFree, a private equity growth fund that focuses specifically on investing in companies that build engagement between restaurants and their customers. Besides SoRewarding, their current holding investments include Profit Streams, Restaurant Sciences, Snapfinger and ThriveSpot.
As to what's next, founder Marion Mariathasan tells us that the company is expanding into ticketing, which will bring automation to the process of purchasing tickets to events, allowing people to buy tickets, drinks and concessions ahead of time (from their phone) without having to use their credit cards. It will be working closely with CardFree to do this, which focuses on the mobile experience and has investments in platforms that facilitate POS integration, etc.
The ticketing piece of the business is expected to launch in the next three weeks, along with SoRewarding's iPhone and Android apps. SoRewarding's deals are currently limited to Colorado, but in the next two months, the startup plans to launch in San Diego, Boston, Phoenix, Kansas City, Chicago and Austin.
For more, find SoRewarding at home here.
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