In the 1970s, Steve Gerring got with the times by putting his business in the Yellow Pages. Less than two years ago, the owner of Gerring’s Car Wash in Wayzata adapted again by offering a special through one of the nascent online deals sites. This time, however, Gerring didn’t go with a one-stop shop, opting instead for the local outfit Crowd Cut.
Crowd Cut began in May 2010 as an alternative to national players such as Groupon and LivingSocial. A few months later, 2000 Minnetonka High School graduate Kyle Hale came aboard as a consultant and then became vice president, and the deals site reached 350,000 subscribers in the first year and 450,000 after 18 months.
“We were very aggressive,” Hale says of his 12-member team based in Minneapolis.
The growth was reached, in part, by partnering with businesses Hale used to frequent as a kid. He reached deals with Lord Fletcher’s where he would tie up the family boat to eat during the summer and Gerring’s Car Wash where his dad would bring the car to be detailed.
“It’s really knowing what they need,” says Hale, a 30-year-old University of St. Thomas graduate. With Lord Fletcher’s, Hale says he isn’t going to try to partner for a summer special. They don’t need help filling the restaurant then, he says.
“I’m not trying to eat into their bread-and-butter time of year,” Hale says, opting instead to provide a special to get customers in the door during the slower winter months. “I think the fact that I’m from the area and I know their business, I myself am not giving my sales team advice to take a bite in the summer. I want to help them in the winter when they really need it.”
For Gerring, the deal with Crowd Cut was a rarity. “Normally, we don’t do a lot of advertising,” he says. “We put ourselves back out there to test the waters and see what’s working for us.”
With online deals websites as a relatively new marketing avenue, it’s tough to know what the baseline is for success. Crowd Cut offers anywhere from 60 deals a month to nearly 100 during the holidays. Lord Fletcher’s has partnered with Crowd Cut in each of the last two winters. They sold 600 specials in November 2010 and about 800 in December 2011.
“I didn’t know if we would sell a hundred or a thousand, to be honest,” says operator Tom Emer. “We did it to gain a little more business and attract possible new customers to try us. Hopefully they love us and come back again.”
Emer says they will try Crowd Cut again. “It’s been all good,” he says. “It’s not complicated and a simple thing really. They give us a list of who’s used it. They’ve been good.”
Emer said Lord Fletcher’s used Groupon once before, selling 2,000 deals among their more than 1 million subscribers. The deal site will negotiate with the businesses on how to split proceeds, with a range of 60 to 80 percent typically going to the merchant, Hale says. The point of differentiation, Hale says, is that Crowd Cut pays its business partners faster than its bigger competitors, and they are based here in the Twin Cities.
“We always try,” Emer says, “to stay local if we can.”
