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I am founder of an online mobile marketing company that sends text coupons and promotions to cell phones. Our customers are local small businesses who wants to send their coupons and promotion to customer’s cell phones. I have the chicken and the egg dilemma where I need to have businesses sign up and place their coupons on our site before I can effectively market to the End Users.

I would like to know the fastest way to get coupons on our site without having to do the costly direct mail campaign. I'm currently boothstraping my company and don't have the resources for a full time marketing dept. I’m thinking of maybe partnering with a company who already has the existing customer base (ie money mailer, value pak) basically your traditional print coupon distributor. I personally think it’s a benefit to them because I’m essentially a threat to their market.

My question is; what kind of partnership should I offer? Or do I have any other alternative in case they say No?

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+1: good question – morpheous Jun 5 '10 at 17:27

9 Answers

These partnerships never quite work out. Even if you can get a deal with a company like Valupak, which isn't too likely, they don't care about you, and they can't really make you successful.

When faced with a chicken & egg problem, you have to find a way to sell simultaneously to both sides of the equation. You need to find local small businesses that already have a mailing list and convince them to do two things: (a) sign up for your service themselves and (b) promote it to their existing customers.

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I've quoted your statement here, and hope you can weigh in: answers.onstartups.com/questions/9332/… – Joseph Turian Mar 18 '10 at 5:21
+1: good answer (I wouldn't have expected any less from none other than the great man himself ;) – morpheous Jun 5 '10 at 17:27

You can try offering some stores an initial trial period at no cost, at the end of which you would hopefully have built up a customer base, using those stores to promote yourself. So if you were thinking about charging stores $100 per week to be listed, then you could waive that fee for the first 2 months to try you out. At the end of that time, if you haven't found customers, you'll need to put more thought into why you haven't been able to attract more users.

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You are not just facing the chicken and egg situation. You are also facing a huge crowded market. There are countless companies working on delivering coupons over the GEO enabled smart phones and over text messaging. Why is your technology better than anyone else? You need to differentiate your business from others.

When the information is overloaded, why duplicate the efforts or reinvent the wheel?

If you can prove your technology can be more effective, and prove your have user base. Those giant coupon companies will come to you and ask you to distribute their coupons.

Also, not all local businesses understand the new technology. They often reject their own coupons when some one print off the web.

Here are my suggestions:

Like someone mentioned above, find local businesses that understand all the benefits of using new Internet and Mobile technology and are currently publishing coupons using ValPak or MoneyMailer. Offer FREE services to them and use exactly same coupon offer on your site. Give them free services until you prove your service works.

Repeat that to get 50+ even more businesses listed on your site. Now you have eggs. You can start asking people to get coupons on their phone. If all goes well, you prove your system works.

Now take that statistic data, testimonials and show other local businesses. They will have to pay a fee.

Take the money you make and offer award to those cell phone users to referral their friends.

It's like rolling the snowball.

Or you can partner with other local coupons sites that already have businesses listed, but don't have ways to expand their reach over cell phone.

The good news is that there are tons local oriented coupons site out there need mobile coupons features. You have huge potential without all the hassle to get business customers on your own.

Or you can partner with local coupons site help them get local business listed with commission and get data feed from them. IT's WIN-WIN.

That's how we got started! Good luck!

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To add to Joel

Sometimes it's all about hard offline physical work.

Either personal sales or telemarketing can help you cover a lot of ground very fast.

Target chains at first.

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Who is the target customer here? The consumer, or the merchant?

If its the merchant, going after the larger chains is not a good idea, esp. when companies like fishbowl are out there, proven and with features that multi-location chains want.

If its the consumer, then you need to make a compelling WIIFM (what's in it for them) beyond the generic coupon clipping / pushing it to a phone. It has to be more than a distribution channel.

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I really appreciate the comments from everyone, they are all insightful. Thank you – Textwave Media Feb 2 '10 at 2:18

Try also some geek forums and blog for this purpose and also for lots of tricks and tips!

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If I didn't misunderstand, you want to get a partnership with your direct competitors i.e. the traditional coupon mailers? Unless you have a good technology that is hard to duplicate, going to your direct competitors would be a no-no because they would probably try to get you to show them what you have and copy it. Or they would want a leg and an arm from you i.e. colabelled product, when IMO you shouldn't be giving to them since you're the guy with the better product offerings. If you have something that will 'break the market' i.e. no-one else is offering it, then you're in a good position to get market share.

I think the bowling pins, in your case, would be customers who are B2B. Cos if they start using you, their users (which are also businesses) would know about you, so there is some organic growth there. Think ambitious, be hungry: offer like a "100 free coupons to all B2B businesses who sign up within the next 1 week" promo, and market it aggressively, online and offline. Buy lists of local businesses, or get them from yellow pages, and do cold-calls or email.

Good luck!

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You need credibility to break out of this dilemma. Why not partner with one supermarket chain store like Safeways, Kroger or Walmart for a local pilot project and prove to them that you can drive business to their stores?

Since you're offering a local service, ask to focus on a handful of district stores and do a trial run. Propose an onsite campaign where you'd provide the resources that would collect the mobile numbers from shoppers at the store after they've finished their purchases, offering them the benefit of receiving the store's coupons via their cells. If they won't give the number to you on the spot, then hand them a card with your web site address. Send them to a specific page that you've set up for shoppers from that particular store location.

Run a coupon campaign using these names and, with the store's help, track the coupon purchases. If the results prove worthwhile, you might have a solid partner that might start collecting the names for you and using your technology to drive business to the stores.

You may not have money for direct marketing. But never forget that all B2B campaigns have logistics to consider.

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I would start with small local businesses. Hopefully, you have some relationships through friends and family. In addition, I would target any merchants (coffee shops, restaurants, etc.) that you frequent. Offer your services to them for free. There should be some takers there.

I would definitely not spend much money on direct ads yet -- walk in or call these stores. Figure out their pain points and what their marketing goals are!

I would also find any company that already does direct mailing (look in your mailings, circulars, radio ads..) and give them free trials as well.

Eventually, this should solve your problem of getting enough coupons on your site. Good Luck

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