Mergelocal is a mobile app that allows users to check in at their favorite places and get paid for telling their friends on Facebook and Twitter about their experience.
Problem: Social Marketing for Local businesses, and even large brands, is time consuming and expensive.
Solution: Mergelocal offers businesses a simple solution to incentivize users for visiting often and telling their friends about their experience through their social networks.
Business Promo Video:
We've learned from our failures. MergeLocal started in Oct 2010 as a cardless loyalty program for mobile phones. The app allowed consumers to track their visits by scanning a QR code at selected merchants to receive rewards for loyalty. After 9 months we found the cost of consumer acquisition compounded with low retention did not allow for a scalable businesses. We've since pivoted to a model driven by our experience in the local market and feedback directly from merchants.
Top 3 Competitive Advantages
1. We do not have a chicken and egg business model
Our entire database will pay users points that redeem for cash on launch. Point values will change based on user activity and focus on driving consumer retention. We project a .09/cpm on social network exposures with user check-ins. This allows us to grow the consumer side without ramping merchant acquisition.
2. We own our data
We are not using APIs to get our data, which means our app is fast. In fact, it's faster to checkin to MergeLocal than on Foursquare or Facebook. Users also have the opportunity to quickly rate each experience/visit which gives incredible feedback to the business. Currently there are no easy methods to rate business from your mobile phone - Yelp does not allow reviews to be submited from mobile devices.
3. Scalable Sales Solution
We've already proven that we can bring businesses on board with our freemium model (2000 businesses have opted and provided their information for a free mobile site and social analytics - see our deck above for more). This builds a relationship with businesses but more importantly allows us to communicate and consult with them in an automated fashion by providing them with social metrics and way to improve these metrics.
In terms of growth, we've also built our own CRM which is directly connected to our business database - so applying our solution to a call center will quickly scale and effectively isolate businesses that are early adopters or are focused on social marketing across the country.
Questions and Answers
Q: What's the problem with marketing at the local level that your company is addressing?
A: Our simple problem and solution is listed above. However, this question deserves additional attention - brand awareness through word of mouth is becoming more complex and more expensive with the rise of social networks. This complexity is compiled when you add mobile technology.
A users attention span is shorter and the quantity of social data processed is staggering. Repetition and recommendations from friends are the only way to stay top of mind. Mergelocal offers a simple solution to drive social chatter at a local level for a low cost, which increases word of mouth, top of mind and brand awareness.
Q: Local is a big business that so many start-ups have tried to address, but often it's too challenging. Why is your service the one that local businesses will embrace?
A: Many solutions require regular business operations to change, which means employees need to be constantly trained on a new service such a loyalty card or mobile coupons. Walking into a business and asking about a loyalty program or mobile coupon to get the response, "uh, I don't know anything about that", is not only bad for the business but reflects poorly on the service used.
Our solutions requires one decision maker to set a budget and an incentive to drive word of mouth - the entire sale can be driven entirely over the phone. But more importantly day-to-day operations do not need to be modified in any way.
Q: What's your go-to-market strategy?
A: Unlike most local solutions, we get to tackle consumers first. Our system allows us to test different point incentives. But more importantly, it fits into what people are already doing - checking in to tell their friends what they're doing.
Once we have a significant user base in a specific community we can increase point incentives at target business to demonstrate the effectiveness by of the product.
Q: What kind of merchants are you going after and what are the economics? How much do you expect them to pay for your service on a monthly basis and what do they expect in return?
A: The initial target market is restaurants and beauty, however we will be expanding quickly into other verticals such as brand targeting for events, which is based on the needs of potential clients. Brand marketing allows local events, shows and non-permanent venues to drive users to check-in to earn points, which promotes 'trending' in social networks.
The cost of services is determined by the business. A daily budget is set and start/end dates can also be set just like an adWords campaign.
Q: I see the viral component of getting people to sign up friends and earning points. What are other ways you'll get the word out?
A: The nature of our service is driving users to post to their social networks. Current stats show that the average facebook user has over 120 friends and the average twitter user has over 110 friends. When users check-in, their friends click through to a custom business page which drives traffic to our site for download and also provides information about the business.
*note that this link is mobile ready and can be setup by the business with a coupon, hours of operation etc. This is great for page rank and quality score.
Q: You're not the first in the 'check in' space, do you look at this as a disadvantage.
A: Not at all. In fact, it's difficult to name more than a handful of businesses that were first to market and have shown longevity in any vertical. We've taken check-ins and made them easier/faster for users and more relevant to businesses. Integrated marketing like this is the direction that mobile must go to support advertising driven services. Display ads have shown limited effectiveness in the mobile space.
Please feel free to submit questions to firstname.lastname@example.org. We love feedback and have driven our business based on the feedback we've received from businesses, mentors, advisors and consumers.
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