Using Scoutmob to Reach Plugged-In Consumers

This week, we explain how this mobile deal platform works for local merchants cautious of high commissions.
Writer, editor, Street Fight
March 20, 2012

Marketing with daily deals can be a terrifying proposition for first-time business owners, many of whom are scared of getting in over their heads by running deals with margins that aren't financially sustainable. Scoutmob is a mobile deal platform developed with these types of cautious merchants in mind. The company helps businesses retain control over the deals they offer by limiting the value of those promotions and doing away with the high commission fees that competing deal platforms have become known for.

How it works: Scoutmob subscribers who download the company's mobile application receive immediate notifications when new deals are added in their local areas. These deals are typically for 50 percent-off at restaurants, cafes, shops and salons, with a maximum discount of $10 or $20. Unlike traditional daily deals, customers don't pay in advance for Scoutmob's offers. Instead, subscribers go directly to participating businesses and hit a special button in the Scoutmob mobile application when they're ready to pay. After looking at a customer's smartphone to verify the deal, a server or merchant will automatically take the value off of the total ticket price. Customers pay businesses just as they normally would—minus the Scoutmob discount—and merchants pay a flat fee to Scoutmob based on the number of customers who redeem their deals during the three-month period while their promotions are live.

Scoutmob in action: Merchants in more than 20 cities nationwide are using Scoutmob as a way to attract customers without giving away huge margins in the process. The company charges merchants a flat $2 fee for each converted customer, as opposed to the 50 percent commission that deal companies usually take for each voucher sold. Merchants that use Scoutmob are also able to limit their financial exposure by placing strict restrictions on the deals they offer. At Holiday Hair Studio in Portland, Ore., owner Robin Carlisle ran a Scoutmob deal that gave new clients 50 percent-off, for up to $30 in haircutting services. Most clients at Holiday Hair Studio pay more than $30 for haircuts, which meant Carlisle was actually taking much less than 50 percent off of the total price tag for each Scoutmob customer. Half of the clients who took part in Carlisle's Scoutmob deal have visited her salon again, and many have recommended her business to their friends.

Why it works: Scoutmob is less about generating immediate revenue for businesses and more about helping them build up a solid base of new clientele. Subscribers are likely to make spur-of-the-moment visits to the businesses featured by Scoutmob, in large part because they don't have to worry about purchasing coupons in advance or printing out paper receipts. The company's mobile application is built in a way that rewards customers for discovering new establishments near their current locations, and gives people discounts for trying hidden gems in their own neighborhoods. In addition to its lists of discount offers, the application includes a news feed and community event listings. By serving as a pocket guide for all things local, Scoutmob has positioned itself as more than just a deal site in the eyes of many consumers.

Maximizing the benefits: Small-business owners that work with Scoutmob don't have to worry about keeping track of how many purchased vouchers have already been redeemed, since consumers don't download Scoutmob deals until they are ready to complete their transactions. Instead, merchants can focus their energies on keeping their Scoutmob customers coming back after the three-month discount period is through. One of the smartest ways to do this is by offering "Return Perks," which are secondary offers for customers who make repeat visits to an establishment within three months of a deal's expiration. These follow up offers serve as a smart way to convert deal seekers into loyal customers.

Read more "How It Works."

Stephanie Miles is an associate editor at Street Fight. She is based in Portland, Ore.

Photo credit: Scoutmob