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CoupSmart is a social marketing system that allows businesses to bridge the gap between offline and online customers and create a measurable, recurring revenue stream from their social media efforts. Its system focuses on collecting the right data from online fans and then automating the remarketing process to deliver the right offer at the right time.
CEO Blake Shipley attended the University of Tennessee – Knoxville where he earned a degree in Finance and Economics. He worked as an internal auditor for The Kroger Company where he was introduced to the world of retail and consumer packaged goods (CPG). Shipley then co-founded real estate startup The Dotloop Company, acting as its CFO before selling his stake in the business to start CoupSmart.
MO: How did you come up with the concept for CoupSmart?
Blake: I was working for The Kroger Company, a major grocery chain, at the time. There I noticed how terribly inefficient the coupon process was. I guess I just figured coupons had been upgraded over the years to take advantage of new technology. But, that was not the case. The amount of information that could be collected from a coupon was minimal and imprecise, and the costs from labor and fraud were high. The opportunity for innovation was clear to me. I wanted to make a smarter coupon that would reduce the risk of fraud and provide detailed information by tying each directly to the customer that used it. It just so happened that social media provided the perfect platform to incentivize customers where they congregate, and capture this valuable data for businesses. This initial idea has led to several different social apps from CoupSmart that work together to drive measurable revenue from social media, while giving brands the opportunity for more targeted follow-ups.
MO: Can you expand on how your system focuses on collecting the right data from your client’s fans and then automating the remarketing process, so they can deliver the right offer at the right time? Can you provide an example?
Blake: CoupSmart’s overall goal is to create recurring revenue from online fans. ‘Recurring’ being the key word. In order to increase the lifetime value of a customer, and turn engagement into sales, we provide an incentive – coupons. When a fan interacts with one of our deals by sharing, and/or printing and redeeming it, we collect that individual data for our client. We then pull in additional psychographic and demographic data from their social media profile to provide a much clearer view of that customer. Next comes the follow-up. The data gathered from previous campaigns can be put to use through automated emails that present a timely, personalized offer based on the customer’s actions. To illustrate two quick examples, a florist may set a trigger for a 15% discount on a bouquet to go out to a husband on his anniversary. A consumer packaged goods (CPG) company may choose to reward a fan with a free item for sharing a certain amount of coupons with their friends. Using the CoupSmart system provides a lot of great opportunities to encourage advocacy and repeat purchases.
MO: Startups typically need to pivot and evolve their business model over time, especially as customers start to use the product or service. Can you provide some advice or lessons learned to entrepreneurs on pivoting while keeping your business moving forward at the same time?
Blake: Pivoting is an important issue in the startup world. Things tend to change very quickly, and if you’re not completely focused on your business and that of your competitors, it’s easy to get left behind. We began CoupSmart as a mobile app targeting consumers. It turned out that the value we were able to provide was better placed in the hands of businesses as tools to reach their customers. So, we had to rebrand and refocus our business model for B2B contact. That was difficult enough, but there is a lot more that goes into actually making a pivot like this work. Communication is the key to success here.
Everyone on your team needs the details. Make sure your employees understand the reason for the pivot, the new target market, the brand identity, and their role going forward. Bring them on board with you and lead the way. Next, explain the change to your investors. Prove to them that you are pivoting for good reason, and have a detailed plan for long-term success. Lastly, contact your current customers and let them know how the business is changing. If this means they can no longer be your customers, phase them out slowly while providing the support they were promised. Once all of this is done, issue a press release outlining your new direction and get moving.
MO: Can you talk about how CoupSmart’s offerings focus on unique social apps that provide measurable ROI from social media and what the business implications are?
Blake: Well, because we track all interaction with our apps (coupons and more) down to the individual level, we are able to see who exactly purchases what and when. We also report who that fan shared the coupon with in their network, and whether that person redeemed the offer as a result. This kind of conversion tracking measures the ROI from social campaigns and identifies those most likely to share and redeem a deal in the future, so they can be targeted directly with follow-up offers. For many businesses wondering what they are actually getting out of social media in the end, this is huge.
MO: Congratulations on securing Series A funding round at $1 million! What advice would you give first time entrepreneurs who are trying to raise funding? At what point does it make sense to start talking to investors?
Blake: The first piece of advice I would give is to try to go without external funding for as long as possible. I’ve been fortunate to find some great investors. But, it is important to realize that the second you take outside money you are no longer fully in control of your business. You now have partners that expect their voice to be heard as well, and that is not something every founder is prepared for. That said, if you do need outside money, get as much sales traction as you can beforehand as it’s pretty rare these days to raise a huge round on just an idea. Now, if you don’t have a finished product yet, you can always make a great mock-up and sell the idea to customers to show that you do have demand when you approach investors. Of course, in the end you must deliver on your promises. So, be careful not to set expectations that you cannot meet even with the proper funding.
MO: What’s the most exciting thing on the horizon for you personally or professionally?
Blake: We have a really big 4th quarter planned for 2012 that has me excited (and stressed). We will be sponsoring and speaking at the Digital Non-Conference in Cincinnati this October. This will put us in front of a bunch of agency folks that need the kind of social media solutions that we provide for their clients. I am confident that we will walk away with some new partners. We are launching a brand new product shortly after that will involve the consumer a bit more directly. We also have several major campaigns within a short time frame that will put our system and employees to the test. This will be hard work, but I love the opportunity it provides. I am confident in my team and the system we have built, so the more opportunities we have to prove CoupSmart’s efficacy the better.