In India, we have more deal sites than unique deals available in these sites and while most of the deal sites are targeting retail consumers, there are very few of them targeting enterprise customers.
Why Enterprise customers?
Given that economy is booming and companies are hiring, it is getting difficult for companies to retain talent. Companies need to come up with incentive based rewards programs to keep employees motivated (beyond the usual compensation levers). And this is the pain point DealsNow, a Bangalore based startup is targeting.
Started by industry veterans (Cofounder, Jagadish was a VP at JP Morgan and Sagar was VP at Ozone Media/Genpact), DealsNow is essentially a deal service that ties up with organizations through their HR function and becomes part of its employee benefits/ engagement program (just the way NextJump does in US).
DealsNow provides special offers on travel, holidays, cars, bikes, mobiles cameras, flowers, gifts, restaurants, spas and other branded products and services through its e-commerce platform (these offers are not available to the general public). Also, DealsNow also provides solutions for employee rewards and recognition through the same platform.
Given that most of the deal sites in India are bleeding and struggling to keep up with customer acquisition cost vis-à-vis margin, enterprise play sounds interesting, but has its own challenges.
Here is a quick QnA with the team on their business model/roadmap:
a. Do you sell Deal service as a SAAS product to enterprise? Many of them have firewalls etc issues and insist that you bring the software in-premise.
DealsNow is hosted on the internet and employees can access it from anywhere. Whenever we sign up with the corporate, we get IT clearance to enable the employees get access to our website and our emails through the corporate network. We already have a basic white-labeled solution as a part of our platform which we activate whenever our corporate partner so requires. For higher levels of customization, we would take it up as a separate project.
b. Why not retail route? Cracking an enterprise deal takes its own sweet time, so why not have a mix of retail+corporate users?
The enterprise route does take a lot of time to crack but it keeps our cost per acquisition very low (as compared to our B2C websites). It enables us to target a high potential audience in a focused way. Also, it keeps our cost per transaction low as our marketing is limited largely to within corporate offices and that too through the corporates – people spend 8-10 hours, 5 days a week in their offices – hence, our platform gets a good exposure.
Plus, the effect of viral marketing amongst employees. Also, a lot of brands are comfortable doing discounts only within a closed user group which is what DealsNow is. The process of tying up with corporates is a relatively slow process but it is an effective entry barrier to competition. Also, with a certain number of marquee clients under the belt this process gets accelerated. We would continue to focus on closed user groups; later on might open up to B2C in a limited way through paid membership model.
c. Future roadmap.
We want DealsNow to emerge as a leading benefits and rewards solution provider. We will target all closed user groups – employees of organizations, members of customer loyalty programs, residents of large apartments, etc. We will be focusing on the employee segment initially. We are planning to tie with 60+ organizations by Mar 2012 giving us access to about 800,000 employees.