The Next Big Thing In Location Based Deal Apps

Flash deals, check-ins, daily deals, whatever you want to call them, location based deal services are now on every newspaper site, startup business plan and news item I read about. To say the least, the market is just a tad bit saturated. Why then would anyone try to get into that space, right now? Answer: The holes in the general business model…

There seem to be many issues with the daily deal business models that scale quickly, then lose steam. Groupon is a great example of this trend. We could get into a huge list of the industry failings, but I in this post I will focus on the main issues that seem to cause the most pain for restaurants and daily deal loving consumers.

The main challenges daily deal services face are:

Retailers:

1) Cost/Benefit – Restaurants are feeling the squeeze on the daily deals. We know it generates traffic for them, but the time of that traffic is very expensive. We also know the most expensive seat in a restaurant is the empty one and therefore a huge need is deals that fill those seats, rather than drive low margin business during normal busy times. In general the huge discounts, plus large revenue share with the deal companies makes the cost/benefit mix a major problem.

2) Lack of social responsibility component – The current daily deal model overlooks the social responsibility need and the fact that consumers want that element in their retail transactions. Though many of the flash deal companies are getting rich at the expense of their business customers, there is no element of taking care of the needy that elevates a restaurants campaign to the consumer and the overall community.

Consumers:

1) Pre-purchased Deals – Having to purchase deals ahead of time is a big consumer complaint. What if they forget to use use it? Having to place their credit card information with the deal company. Not being able to pay the restaurant directly when they actually use the deal.

2) Limited Deals/Options – The industry typically sends a limited number of deals with a short time span to take advantage of it. This gives the consumer not needs based option for getting a deal when they actually want one.

Recently, I heard about a new location based deal app start up that has finally addressed these major business and consumer issues. I was so impressed with what they are doing, I asked to sit down with them and discuss their business model and deal solution platform. Introducing TangoTab.

The TangoTab dining deal solution addresses all of the concerns of the local and chain restaurants in several unique ways. Their system drives consumer traffic when the restaurant wants and needs it, by allowing the establishment to pick the times of day that their deals are available. Additionally. restaurants only pay a small success fee when TangoTab delivers results. The incredible twist that got my attention is the social responsibility feature of contributing a percentage of every deals revenue to feed the hungry in that same community. An incredible combination of advantages for the businesses and their social media marketing, as well as the consumer.

TangoTab doesn’t stop there. Consumers not only get the ability to feed the hungry through their dining experiences. they no longer have to pre-purchase deals, but instead pay the restaurants at the time they accept the deal. Using location based functionality, consumers get options that we all want.  Need based deals that can be searched and used on the spot when you want or need a deal. What a better time to get a deal but right when you are deciding to go to lunch/dinner and aren’t sure where you want to go. Game-changing…

They have launched on the iPhone platform with a coming Android version soon and claim to have upcoming versions of the app that will be socially integrated into Facebook and Twitter for sharing. The start up has already launched in Dallas, New York City. Oklahoma City. Chicago and Los Angeles, and are just beginning to release into Toronto, with many other cities slated this year.

Though the company would not release its current user base information, something I found very interesting is their user marketing strategy. It has two components that should be equally effective. First, they are running a monthly sweepstakes drawing for $100 gift card. Every new user that signs up through the sweepstakes portal receives an entry into that months drawing, whether or not they are in a North American city the company has a presence. Secondly, as you refer others to join, you get additional entries into that months drawing as well, turning socially responsible dining deals into a viral sharing growth machine. Highly effective with additional benefits to the consumer. A win-win!

To join TangoTab and be entered into the drawing, visit the sweepstakes page. Restaurants and consumers alike can get more information on the main website.

I for one am looking forward to sharing TangoTab with many brands I consult and using it for easy deals on my terms, while benefiting the hungry as well.

Robert M. Caruso
@fondalo
Founder/CEO – Bundle Post

12 Comments

Filed under geolocation, location based services, Social Media, Social Media Marketing, Uncategorized

12 responses to “The Next Big Thing In Location Based Deal Apps

  1. The recent winner of Startup Weekend Idaho, @BolstLocal, is a local deal application. I think they’ll be doing very well.

  2. Love what they are doing! Having come from a company in the daily deals space, I dont agree that a restaurant owner filling an empty seat with a daily deal is as important as say the Duck Tour filling an empty seat. If that restaurant seat remains empty, sure the restaurant has a potential loss but they didnt cook food that wasnt served and is later thrown out – there are no up-front costs. the Duck Tour on the other hand goes out whether there is 1 person or 20 people. The costs are the same and they are spent as soon as the tour leaves the station.

    • and giving the restaurant the ability to fill seats at times THEY need is a huge benefit. Love the all around solution they have and the handling of the needs of both sides of the transaction. Thanx for the input Christina!

    • Hi Christina…never thought we would have an exchange on a blog LOL..I hope all is well. Restaurants incur costs that people forget about, Hydro, Gas, Labour, Rent, shrinkage (waste) etc etc….so I would argue that it is just as important to the BUSINESS that they generate revenue per hour just like any other business. Restaurants cannot close their doors if 90% of the tables don’t have bums in them…just like the tours…the show must go on… Yet they still have costs associated with keeping the lights on and staffed. Having the ability to generate revenue to keep that sale/hour high goes a long way to help restaurants become more successful and more importantly, profitable.

  3. Pingback: Thanks for the Shout Out « TangoTab

  4. The business model is horrible!

    I wrote an article on it at the start of last year. It is a sad state of affairs that the only win situation for most companies that participate is when the customer pays for the deal but doesn’t turn up to redeem what they have purchased.

    It generally doesn’t build customer loyalty either because the clients that use this type of deal tend to hop from one venue to another for the cheapest deal. The ones that stick are the exception rather than the rule. Restaurants need repeat business and a word of mouth following – word of mouth spreads from this type of deal but again only to people looking for bargains.

    Love the idea of TangoTab seems like they are redressing some of the issues involved for both sides from the “Groupon” model.

    • I hear Kittie. I have been a critic of the daily deal model for several years myself. So awesome to see a startup tackling all the issues surrounding it with mutual benefit beyond the revenue stream!

      Thanx for the input!

  5. Pingback: The Next Big Thing In Location Based Deal Apps | Mobile Loyalty | Scoop.it

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