Ideal Network is a daily deals site that gives up to 25 percent of the purchase price of the product or service to a non-profit of the consumer’s choice. The Seattle-based company was founded in 2010.
SUB: How does your daily deals service work? How are you integrating cause marketing into the service?
Bell: Like other daily deal sites, our members sign up and receive a daily deal with a coupon that offers a great deal at a local merchant. Unlike other daily deal sites, 25 percent of the purchase price goes towards a nonprofit or school. Which is real money for causes.
We’ve done something that I think is really powerful: we’ve connected the cause to the member, rather than to the merchant. If you think about it, in traditional cause-related marketing a merchant and a cause are linked, and everyone sees the same deal (whether or not you care about that cause).
We call what we do personalized cause marketing: all of our members in a single market might see the same merchant coupon (e.g., 50 percent off at Theo Chocolates), but each member will see this coupon paired with his chosen cause. So a dog lover sees that 25 percent of his purchase price goes to his local humane society, while a breast-cancer survivor sees that her chocolate purchase funds Susan G Komen for the Cure. We are seeing that this really impacts how members are motivated to buy and to share.
SUB: Who do you see as your primary competition?
Bell: We compete against other daily deal sites, of course. But in the bigger picture we compete against cynicism, or the belief that you cannot make big change by taking little steps. It sounds a bit corny, but we try to keep that close to our heart.
SUB: What is your value proposition for the consumer? How do you differentiate yourselves from sites like Groupon in terms of consumer benefits?
Bell: There are a lot of daily deal sites out there, and from a consumer’s point of view, I think that they are pretty much identical. Honestly, what’s the difference between Groupon and Living Social? They’re both great companies—don’t get me wrong—but do their value propositions differ?
Our value proposition is totally, completely different. It centers around the causes, and the fact that every time you buy, you support a cause. And we’re not funding the general operating budget of a cause, but rather a specific, measurable community project. For example, Habitat for Humanity is using the Ideal Network to raise $5,000 to restore one home in Burien, Wash. for a low-income family.
If you think about it, most of the things for sale on daily deal sites are not necessities. They’re nice-to-haves. If you can get these at a great price, while raising a meaningful amount of money for a cause you care about… that’s the sweet spot we are looking for.
SUB: Who are your target customers? How are you marketing the site?
Bell: Our target customers are regular people who are looking to make a difference, even if just a small one, with their purchases: people who expect a little more from their brands. Someone who, when looking at two apples, would probably choose the organic one…but would check the price first.
In terms of marketing, we’re not spending a ton of money right now on advertising. Instead we are marketing the site in partnership with our causes which really serves to highlight our strengths.
SUB: How much outside funding have you raised to this point? Do you plan to raise more in the near future?
Bell: To date we’ve raised a very small friends and family round of financing, which has taken us from an idea sketched out on a white board to a working website. Now we’ve launched, we have real customers, causes, merchants, members and revenue, and we are ready to raise some growth capital from individual or institutional investors.
SUB: Where do you see Ideal Network in roughly a year from now?
Bell: We anticipate being in 15 additional markets and on our way to building a nationally recognized brand that is known for supporting non-profit and creating positive outcomes in our communities.
SUB: What have been the biggest challenges your startup has faced to this point?
Bell: Cutting through the noise—so many emails, so many daily deal sites, so much commerce—so that consumers can appreciate our unique value. When people get it, they love it. It’s just a challenge to get people to pay attention.
SUB: Finally, a question I always ask: as an entrepreneur who has weathered the down economy, what advice do you have for those just starting out—especially in an economy that remains less than dynamic?
Bell: I know this may sound silly, but my advice is to create a well-designed, thoughtful product that creates a solution to a real problem. If you do that you have at least a fighting chance to succeed.
Ideal Network – www.idealnetwork.com