Wednesday, January 12, 2011
Interview with Loren Bendele, Savings.com
Story by Benjamin F. Kuo
It's been a very busy for coupon and deal sites over the past few months, with a giant, $950M round of funding for Groupon, and the acquisition of at least three locally headquartered coupon and deal sites--LogicBuy.com, NextCoupons.com, and DealPerk--in the last month. For some perspective on the industry, as well as to learn more about the company, we spoke with Loren Bendele, CEO of Los Angeles-based Savings.com (www.savings.com).
First, for people who aren't familiar with the site, talk about what you offer to consumers?
Loren Bendele: We go out and get the best deal available, for whatever a consumer wants to buy. We use the technology and the power of our community to help prioritize and vet those deals, making it real simple to find those deals you're looking for. There's a lot behind that, but it's really a matter of going out and getting the best deal content, and using the web and community to sift through all of that to put the best deal out there in front of you.
What's the story behind Savings.com?
Loren Bendele: We started in March of 2007. At that time, there were already a lot of deal sites out there, but we didn't think any of them were investing in their business to build what consumers really wanted. Some were good at one thing, or another, or maybe just a couple of things. But, no one was investing in the elements we thought was needed to become a dominant player. We invested heavily and did some smart things, worked hard, and became one of the top players in the space in short order. We had great growth, fueled a little by the downturn in the economy in 2008. We definitely benefited from consumers hungry for a deal and merchants hungry for sales. We were able to sit in the middle of that, and benefit from both demand and the supply of deals.
More recently, we've been focused on deal overload. That's because there are now so many deals out there, and so many deal sites out there. My favorite question when talking to consumers and friends, is how many deal sites do they subscribe to? Most people say they are on fifteen to twenty sites, but when you ask how many they read--it's none of them. They're just overloaded and overwhelmed by deals. We're focused on making it easier for consumers to sift through all of the noise, and find the best deal on whatever you're looking for. The way we do that, is you can come to our site, pick a particular category or merchant you like, and we have all of the deals available for that merchant or category ranked by popularity, and also by what the community thinks is the best deal. It gives you high confidence in finding the best deal, very quickly. We've also got features in beta, where we'll be launching a personalized deal experience as well. You can tell us something about the brands, merchants, and what types of deals you like, and we'll send those to you via email, or when you go to our site. You'll see your deal feed, of the best deals for something you're interested in, and have a daily pulse of deals you think are of interest.
There has been lots of interest in coupons, deals, sales sites, and such--not to mention lots of new companies. What do you think is driving that interest?
Loren Bendele: A few things. One, is because the economy took such a hit in 2008 and still hasn't rebounded, it's become acceptable to look for deals. I think maybe five years ago, it was uncool to be looking for deals or using deal sites. It was seen as being cheap--like your grandma clipping coupons for groceries. That changed dramatically at the end of 2008. It was not being seen as being cheap--it was seen as being smart. It was fund to be savvy, to find that great deal. I saw an article recently, which stuck with me, where they said "value is the new black". It's cool to be value conscious. things are driven predominately by the economy. I think that a few sites are doing it right, giving good experiences, such as savings.com. I think we've created a kind of deal economy, where part of the shopping experience is to look for a deal when you're trying to find anything.
As you mentioned, there are a ton of sits out there nowadays. How do you get above the noise?
Loren Bendele: First and foremost, is the deal content. You have to have great deals. It's one of the things which we've invested in, with direct merchant relationships. We've been negotiating with merchants for exclusive deal content, and have a better merchant relationship than any of our competitors. That was proven last year, when each of the major affiliate networks gave us an award as the merchant's favorite publisher, from Google, Commission Junction, and Linkshare. We've been developing those merchant relationships, so we can negotiate and procure the most exclusive deal content. If you have the best deal content, you can do everything else poorly, and you will still have consumers coming to our site. You can be slow, you can be inefficient, but if you have a great deal, people will come. We want to not only have great deals, but we also want to give great user experience and make it efficient to find the deal you're looking for.
We've also been spending a lot of time on QA, making sure that deals are working. One of the biggest complaints we get is that those deals have expired or changed. Lots of coupon sites don't do a good enough job to make sure those deals are working. We spend a lot of time doing that. We're also bringing in the community element, and having people vote on deals. That gives our consumers a lot more confidence that it is a great deal, and allows that in a scalable way so we can prioritize and rank deals for thousands of merchants, and tens of thousands of deals. That gives us great deal content, and we're focused on the user experience so that they can quickly find and have high confidence that the deals will work.
I'm also excited by what we're seeing in initial results from our personalization efforts. You just tell us what merchants you like, and you can come back every day and see deals from the top merchants. That might be from REI, Gap, Macy's, from any of the travel sites like Orbitz or Expedia, or brands such as North Face. You can tell us the things you're most interested in, and you'll just see the top deals for those things.
Looking at how many people are now in the deal and coupon industry, do you think that might lead to some consolidation?
Loren Bendele: I think there will be some consolidation, but I also think we're in the early stages of this. It's not like it's a mature industry right now, and the only next step is consolidation and rollups. There's lots of room for innovation, and there are new players coming out and doing interesting things. I think it's a very exciting space to watch. There is so much demand from consumers, merchants are hungry for sales, and we're all trying to understand how to manage deal and promotion strategy. I think there is room for innovation and new players entering the space, doing unique things. I think it will be tougher for people who are directly competing against what we are doing, however. That space is getting tougher, because it's tougher to get exclusive deal content unless you have scale and volume, and without exclusive deals, it's difficult to build scale and volume. That said, I think there will be innovative things from companies such as HauteLook, Rue La La, and other private sales folks. There's still lots of room for innovation.