Have you seen Extreme Couponing on TLC yet? When’s the last time you used a coupon to get a discount on a particular item you wanted? When’s the last time you bought a random item just because you had a coupon for it? (I do this WAY too often.) This week we are shining the CalMU Business Spotlight on Savings.com, a Los Angeles based shopping website that provides discounts and coupons for myriad products from both local and national businesses.
The website is designed for usability, with a simple layout and organized category and city sections. It has deals on endless products and businesses; enough to overwhelm you and even make your head spin a little. But we have not chosen them for our Business Spotlight because of how much money they can save you – although this is what businesses are supposed to do, right?
Instead, they have been selected because they are a brilliant example of affiliate marketing. The retailers whose coupons are on the website pay them a commission from sales made by customers who use the coupons and special discount codes to buy that retailer’s products. This is a very effective advertising channel for retailers (remember what I said about buying items just because you have the coupons?) and enables Savings.com to quickly expand because they don’t have to spend the time and effort searching for deals. Thus it’s a mutually beneficial relationship and holds tremendous upsides for all three parties involved – the third party being us, the consumers.
Their business has exploded over the past three years. Why? Well, they were founded in 2007 “out of frustration with the current state of shopping and discount retailers online,” which was definitely a great observation and they capitalized on it beautifully. But what else strikes you about when they started their operation? The year 2007 of course! What was happening during that year? (And I’m not talking about the birth of the iPhone or the last Harry Potter book being released.) That’s right – the economic meltdown that affected all of us and forced us to clamp down on spending. And what happens when we stop spending and become more fiscally conscious? We look for the best deals around so that we don’t have to surrender all of our budgetary freedoms.
In 2007 when they started up, they had a revenue of $914,397 and only 7 employees. 3 years later their revenue skyrocketed to $19.9 million in 2010 and they added 61 employees, making a 3-year growth of 2077%. They have been ranked by Inc. Magazine as the 3rd Top Retail Company in 2011 and have no signs of slowing down. Based on their observation that online coupons websites were lagging and the economy would make them even more attractive, they have created an online affiliate marketing empire and, for these reasons, we have chosen to shine the California Business Spotlight on them.
So a note for our on-campus, Hybrid MBA and online MBA students: when you are thinking about starting a business, make sure you do thorough market research and set yourself apart from the field by offering something that is both lacking in your niche and relevant to the current market. We stress this endless in all of our MBA and Doctorate programs, including our online MBA programs, but showing a real world success story is always a good example and motivator for all of us to get inspired!