The daily deals business has gone supernova in the past year, but online deals actually aren’t all that new.
A product of the first internet boom, Travelzoo burst onto the scene with travel- and entertainment-focused deals in the early 2000s.
But the industry has changed much since then — the amount of competition is larger than ever and new technologies continue to alter the landscape with each year that goes by.
So what’s it take to keep up with the times? There’s plenty of adapting to do, but there’s one piece of the puzzle that no deals provider must never forget: the customer.
We spoke with Dave Ambrose, founder of Scoop St. and now mobile head at Travelzoo, about what it takes to succeed in the industry, and how mobile is changing how they do business.
“The hardest part is about keeping the audience engaged and continuing to grow the audience,” he says. “I think you start realising that the most important thing is making the customers really happy. You want to surprise them and you want them to like you. When they open up the email every morning – or every other morning or when the deal’s relevant and it comes up – you want them to be excited.”
Here’s the full interview with Ambrose (edited for clarity and length):
How has mobile tech changed the landscape in the deals and local commerce space?
The daily deals business is about three years old. And I don’t think a lot of people realise that – they may think it’s many years older in terms of offering coupons.
For the most part, the mechanism in which consumers receive a deal is through email, and there are a few tenets of the model that are really important. The quality of the deal has to be really high. It can’t be a deal that gives five or 10 dollars off – the value has to be there. And if it’s not there, the core metrics of the business will go down – your open rates and your click through rates – will get smaller over time. This means you won’t be able to push more deals through the channel where most of the business over the past few years was built.
We don’t publish every day. It could be every other day or just whenever there’s a really great deal we’ll publish through local at Travelzoo. So when people talk about daily deals, it’s interesting. If you offer a deal every day, it would be surprising if the quality of those deals goes down over time, because it’s so much work and so much effort to go out and structure and negotiate a package. I think that, for us, it’s more about the value and not the frequency of those deals.
So with that being said, you have to figure out how to keep your consumers engaged and with you at all times – and that’s basically found in the pocket. I think we’re seeing mobile has a few useful factors.
And so why does mobile matter for Travelzoo?
The growth trajectory that we’re seeing on mobile is quite exciting to us. We’re excited about the possibilities there. We’re really focusing on the best experience possible for the subscriber. The reason that is important is that right now when people come to Travelzoo, the core product is called the Top 20, which is published every Wednesday. And that’s what the company started out with basically. Those are the best 20 deals in terms of travel and entertainment.So every Wednesday folks expect the Travelzoo Top 20 to come out, and you realise that there are other days of the week that people could be engaging with the brand. And for subscribers that trust so heavily in the Travelzoo brand and voice, they want to be in the know about what’s going on. So if you think about it, entertainment and local now help bridge that gap and fill really interesting and great content. But until now, once you leave your computer, there was no way to carry Travelzoo with you.
We had to take a step back and think about our business and say: what can we do to best serve a subscriber, in terms of what they really use Travelzoo for? Once we go to that destination, what happens? How do we follow where they’re going? How do we actually help them find things in their area?
Mobile connects you to the website. You see the email from Travelzoo, then you can go look at what the deals are, and you can go to the client’s site. To me, what I’m trying to drive forward is connecting those two pieces of the business.
What do you think is the hardest thing to overcome as a deals provider?
The hardest part is about keeping the audience engaged and continuing to grow the audience. And I think that’s the point of looking at a business like this, that was built during the first dot-com wave, and took all the value and sent the best deals on the web, sending it out in one email called the Top 20 every Wednesday. Consumers started figuring out what to expect in terms of the value of Travelzoo as a brand. So they’re not looking at Travelzoo as a coupon facilitator, they’re looking at it as a value and destination generation that you want to go to.
So I think it’s largely in the case of a daily deal – I don’t think you want to build a business that just says I’m going to offer coupons. I think it’s quite boring. You want to figure out a way that you can build a business and integrate local offers as a way to excite you as a subscriber. It’s quite difficult to keep consumers engaged because the quality at which you have to deliver a deal has to be so high. We’re all human beings and it’s really really difficult to keep the quality super high just to say that you’re a daily deal.
So that’s basically the difference between providing a deal every single day, compared with what Travelzoo does?
After building a company in the space myself, I think you start realising that the most important thing is making the customers really happy. You want to surprise them and you want them to like you. When they open up the email every morning – or every other morning or when the deal’s relevant and it comes up – you want to be excited. I really don’t want to see deals – as the consumer – that are just five dollars off or 10 dollars off.
And I remember this during Scoop St., and I also hear that from folks when I talk to customers here at Travelzoo. But they say it to me like this, which is really interesting. They tell me that they’ve been coming to Travelzoo for five or six years now – and that’s double the life of the current daily deals business – and they say they’re coming to Travelzoo because you’re always publishing offers that are $200-300 off, not just some coupon.
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