Online group coupons aren’t new to Alberta, with services like Groupon, LivingSocial, Dealfind and TeamBuy vying for business in Calgary and Edmonton.
But Jasper Collins and his partners saw an opportunity in Red Deer, and chose the city as the place to launch their entry into the social media advertising market. The result is DealSpend.
Launched May 31, DealSpend offers limited time discounts on local products and services. On Tuesday, it was pitching $150 worth of CrossFit training at a Red Deer fitness club for $27.
Prior to that, its online deals included deep discounts at a consignment shop for children’s merchandise, for pizza, for tanning and for yoga classes.
Offers are available for a limited time, usually 24 hours, and can be purchased online. Prices are up to 90 per cent lower than the regular cost.
“What it does is offer retailers, or any businesses, the opportunity to showcase their business without having to incur up-front costs in advertising that don’t always pay dividends,” said Jasper Collins, one of the seven founders of DealSpend.
The purpose of online group coupons is to encourage consumers to visit participating businesses, enticed by a discounted products or services. Once there, they’re likely to spend more than the coupon amount, noted Collins.
“They typically tend to overspend anywhere from 30 to 60 per cent of the original voucher.”
Plus, he added, the businesses are able to showcase themselves, and hopefully generate repeat business and referrals.
Collins expects DealSpend to attract dozens of buyers for every deal it posts, and a guaranteed level of exposure for its business clients.
“We want to be able to offer a business owner a kick at having a hundred new people trying out their service.”
DealSpend has a sales director in Red Deer — George Atkey — but most of its partners live in Calgary, said Collins, with one a Vancouver resident. Their backgrounds include advertising and information technology, and they’ve been working on DealSpend since last year.
The decision to launch the venture in Red Deer was motivated by the city’s central location, the lack of competition here and low local marketing costs relative to bigger centres like Calgary of Edmonton, said Collins. Plus, he added, the local demographics are favourable.
“It’s a very young market in Red Deer, so there are a lot of Internet users.
“I think the potential for Red Deer is great.”
Collins and his partners are eyeing other markets, with the electronic infrastructure they’ve built easily expandable and transferable.
“The platform that we have, we could branch out to Calgary, Edmonton, we could do Vancouver, we could go the States,” said Collins.
He added that DealSpend should be able to distinguish itself from other online group coupon services through the support it provides its business clients. This includes information about consumer buying habits.
Online group coupon services receive a percentage of the sales they facilitate. Consumers pay for product vouchers or coupons online via PayPal or credit card, and in the case of DealSpend receive a $5 credit for every person they refer to the site.
DealSpend’s website is located at www.DealSpend.com, and it also has a Facebook page and a Twitter account.