With the high failure rate of start-ups across the globe, gaining credibility in the market is a major challenge for new business owners. With some smart moves and relationship building, Daniel Aufrichtig, Daddy’s Deals founder and CEO, fast-tracked this process.
Daddy’s Deals is an online retail store giving consumers access to a variety of exclusive special offers. It differs from other deal buying models currently on the market in that it is not a group buying site – if a consumer buys a voucher they will automatically qualify for the deal, regardless of how many people buy it.
Aufrichtig previously owned and ran an online media and advertising agency which he sold last year. He then decided to launch an online retail store, but needed two key elements – seed capital for the construction of the business and a qualified customer base. Aufrichtig teamed up with the Daddy’s World group, known for the quirky Daddy Long Legs Art Hotel and Old Mac Daddy Trailer Park in Cape Town. Between the founders and Daddy’s World, funding in excess of R2 million was injected into the business.
Through his online media agency, Aufrich-tig, had established a relationship with kulula.com’s joint CEO, Gidon Novick, as he had previously done work for the airline. One of the biggest online retailers in South Africa, Kulula.com, has an established fan base of 1,3 million subscribing to travel offers. Teaming up with kulula.com meant getting access to that customer base, and being introduced to the low cost carrier’s merchant partners.
Novick liked the idea. He explained that kulula’s objective was to extend its customer offering. “We have been approached by smaller guys who want access to our database, but we needed to work with a company we believed in and could work with.”
According to Aufrichtig, teaming up with kulula has given Daddy’s Deals credibility. “Because kulula is a trusted brand, people are happy to use their credit cards to purchase from the company.The database trusts the content they get from kulula, so they will open the emails they receive.”
How it works
The emails sent out to kulula’s database include a mention about Daddy’s Deal with a link to ‘opt in’. During the pilot phase which saw 7 000 customers receive the mailer, there was a 57% click through rate, with 10% resulting in actual sales. Daddy’s Deals expects to convert around a fifth to a quarter of the entire kulula database. There will also be a link on the kulula site to Daddy’s Deals. n