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New group-buying company Offermatic came out of stealth mode today. The venture describes itself as a “Groupon/Mint.com/Blippy hybrid” that doesn’t share your info publicly.
Groupon and other group-buying competitors sign members up to receive deeply discounted offers from local merchants looking to grab new customers and hip reputations online.
But Offermatic says it uses a new model that improves conversion rates of return customers by 10 – 100 times over existing methods for merchants.
Theoretically it does this by removing “all friction” from the offer-redemption process for consumers by linking “virtual coupons” directly to consumers’ credit cards.
Founder Faisal Qureshi (pictured) told VentureBeat he came up with the concept when he was using Mint to manage his finances, but found that while the company had loads of data on his spending history, it was still sending him offers for a new bank account or credit card.
Qureshi said that even when he was interested in the offers, the process of redeeming the right ones was so labor intensive he’d often just ignore them.
Is it that “information overload” that will ultimately be the downfall of many new discount buying websites? Qureshi says yes — and sooner than we think.
“Consumers are being overloaded with deals and offers from so many channels that they’ll need filters to help them find the right deals [and] offers for them,” said Qureshi. But by tying discounts directly to a consumer’s credit card, buyers automatically become more likely to use those coupons because the process is much more simplified.
“The daily deal model has it’s own challenges and constraints,” said Qureshi. “New models that make it easier and more convenient for consumers to save money, while providing merchants with ‘profitable’ new customers, not just new customers, will put pressure on the daily deal model. Merchants will focus more on the ‘quality’ of new customers than quantity.’ Lots of new customers that aren’t profitable is not a formula for success.”