Mumbai-based startup Izzideals.com offers not just virtual but SMS based deals to consumers

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The humdrum of a desk job usually gets to people and so was the case with Rahul Chidgopkar, who joined an IT company after completing his engineering degree. He thought MBA would be a way out and so he pursued one, secured another job, but after a few years, he was again resigned to the confines of the desk. To escape the monotony of corporate life and do something he could call his own, he, along with a couple of friends from his alma mater, IIM Indore, first-time entrepreneur Rahul converted his business idea into a reality with IzziDeals. Jubin Mehta from YourStory.in caught up with him to know more.When did you launch the startup and how does Izzideals work?

Izzideals was established in March 2011. We initially started off with the aim to build a SMS-based deals service that would be simple and location-relevant by tying up with mobile operators. The process is simple. You visit an area and check the local deals by sending a SMS to a toll-free number. We offer you the list of deals. If you choose a deal, we will debit Rs 3 and give a SMS coupon instantly. On redeeming the coupon, Rs 5 will be credited to your prepaid/postpaid account. So, service would be incentivised. We pursued mobile operators with our concept and even tasted early success by securing a tie-up with MTNL. Things got a little tough thereafter. We kept chasing the bigger telecom companies, but several promising meetings lead to naught. We took stock of the situation and in July 2011, we decided to focus on getting our service out in the market using internet as a channel. We sacrificed features like location relevance and instant cash back, but gained wider reach as we were no longer operator dependent. Our USP still remains instant SMS coupons on demand. No print outs, no online payments. We launched our beta version in October this year. Now, a user has to complete a one-time registration process and thereafter can get any coupon by sending an SMS – IZZI BUY <UNIQUE DEALCODE> to our short code. Whenever a user redeems the coupon, the merchant informs us and we credit Rs 5 into the user’s account. On accumulating Rs 50, the user can get a mobile recharge or gift voucher of equivalent amount. We are also working on a one step SMS registration wherein user can send IZZI REG <email address> and get registered instantly.

How does ID scout for the deals?

We approach merchants and talk to them about changing the way they create and offer deals. We are giving them the confidence that with us, they’ll have a better chance in retaining customers. However, many merchants are initially a bit hesitant as we charge them vis-à-vis a group buying site, which promises them ‘free promotion’. So we are offering merchants a free trial for limited number of customers. Once we establish our credibility, we will monetise the model. We have also created an affiliate program wherein people can become IZZI Affiliates and source deals on our behalf. We will operate on a revenue sharing basis with them.

There are numerous ventures following the “we offer the best deals” business model. What is your USP?

After the success of few early movers like Snapdeal and Mydala, everybody jumped in and worked on a similar model. The market has more than 40 odd big and small companies doing the exact same thing. But here is our take on what people really want from a deals service. They don’t want to be spammed. Unfortunately, subscribing for deal alerts has become akin to opening your inbox to spam. You get daily alerts with several deals crammed in. Most of them are not as per the users’ interests. People, in our view, want deals tailored to their preferences. As for merchants, they want to retain customers. Despite promises from deal sites of a booming business, many merchants have experienced a very short-lived spike in sales at significant loss, and hardly any up-sell or repeat business opportunities. So what we decided to do was look at the bigger picture. We did not put any deal alerts option on our site. For first few months, we will only observe user response. Then, we will build a recommendation engine that will recommend different deals to different customers based on their profile, preferences (specified during registration) and past choices of deals. On the merchant side too, the focus will be very clear – repeat customers. We will help merchants create private deals which will be offered only to select customers based on their potential for repeat business. For example, if you redeemed an offer of a local restaurant three times in the last year and your neighbour did not, you will get an exclusive offer from the restaurant the next time but your neighbour won’t. This will enable much better engagement between you and the restaurant and both benefit from it.

Are you only focussing on Mumbai now?

Mumbai is our laboratory. In the first two weeks of our launch, we have learnt several important lessons and are making some major changes to our offering. Once we have a stable product and a strong presence in Mumbai, we will venture out into other cities.

How do you market ID?

We have a multi-pronged marketing strategy (another way of say we are trying out all possible things to see which one clicks). We have started by putting small tent cards in our partner merchant outlets. This is to get some visibility and will help customers connect with our brand. We are also actively using social media, but are working on a few themes to make it more engaging. Another important aspect for us is to showcase the merchant’s expertise, rather than just deals. So we will invite merchants to share their knowledge through guest blogs. This will be a useful value addition as customers can engage with merchants more effectively rather than just reading the merchant details section.

Define your revenue model?

Our business is based on the SMS system. The customer doesn’t pay. That’s another USP of our service. We charge the merchant on a per lead basis and collect payments by cheque. Whenever a customer purchases a coupon, we consider it to be a qualified lead. We plan with the merchant and set some targets for a deal. If 50 leads are to be generated, we charge the merchant upfront before the deal goes live.

Tell us something about the traction rate on your site.

We have had close to 1000 unique visitors in 15 days. However, going forward, we will focus on transactions rather than traffic as many people will avail our offering directly through SMS, rather than visiting our site.

Are you looking to expand your business and hire more people?

We are currently looking for sales professionals. A solid two to three-member sales team would be ideal. However, three to four months later, we will build our own technology team to build the recommendation engine and several other features, which are in the pipeline. We will also look to expand through affiliates when we branch out into other cities.

Go to www.izzideals.com for further details!

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