Merchant Combines Groupon with SMS, Finds Sweet Success

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Gelato Spot, a chain of five locations in Phoenix, seems to have found a deliciously simple solution to the problem of turning serial daily deal users into repeat customers - ask for their phone number.

Since February, inviting Groupon voucher redeemers to opt in to Gelato Spot's SMS marketing program has helped the small company quickly build its mobile list to 1,700. That number was primarily achieved with a few Groupon offers and by having cashiers ask for cell phone numbers whenever a customer utilizes a deal (usually $10-for-$5). The patrons are enticed to yield their phone number with the promise of $1 off their next purchase courtesy of a mobile coupon.

Eighty percent of customers have stayed on the list for at least three months, Tommy Plato, Gelato Spot owner, told ClickZ News. "Groupon customers are more tech savvy," he said, "so they are easily convinced to sign up for our SMS couponing program."

Gelato Spot and its mobile marketing service provider Cellit send between two and four SMS specials per month, and 12 percent of recipients redeem the coupon and place an order. That's around 200 customers in raw numbers.

For a single recent offer, Plato said, the redemption rate was 44 percent, equaling almost 750 customers through the door. He said the mobile pitches were getting "the highest redemption rate [we've] seen with any medium."

In addition, Plato said, "We are capturing their data to remarket to these customers and turn them into regulars… We run a deal with Groupon roughly every 90 days, and then we capture as much data as we can from the influx of traffic we get and push our Cellit text messaging loyalty program."

Here are two SMS copy examples involving Gelato Spot's offers:

Open 11AM-9PM The Pizza Spot inside Gelato Spot Old Town Scottsdale 25% off entire menu Pizza, Salads, Panini, bring your friends

New Flavors Alert! Fresh Peach Sorbet & Chocolate Peanut Butter Gelato. Both are insanely good! Here $1.00 off any size!

Interestingly, Plato suggested that he has a partnership with Groupon that gives his SMB a bigger piece of the normal sales pie. Under regular circumstances, merchants and the daily deal site agree to a 50/50 split.

"We are a merchant partner with Groupon," Plato said, "so our splits [are] better than most merchants who run a deal, and we have a deep relationship to cross-promote our businesses through other media sources besides their platform and database."