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VERSACE: CityWorth shares the wealth from daily deals
Question of the Day
In recent weeks, we have all felt the pinch as a result of the combination of rising fuel and food prices amid little to no income growth, per Bureau of Labor Statistics data. With those prices set to move higher, consumers are looking for ways to minimize the pain while investors are looking for ways to profit from it. Some will look at Groupon, Living Social and other deal sites for help. I think one to watch is Washington-area based CityWorth because it brings you daily deals and can put some cash into your pocket.
I recently sat down with Steve Kann, co-founder and head of CityWorth's business development efforts, to learn more about the company.
Q: Steve, in your words, what is CityWorth's business?
A: We see CityWorth as a force for economic good in our country. We're a daily-deals company offering free membership to access deals of 50 percent or more off fun things to do and buy from great local and national businesses. We're like Groupon, only better — better for merchants, better for customers and better for local communities. And we share the wealth generated from this economic activity with our members, who help us grow our audience through word of mouth.
Q: We've heard a lot about online couponing and discount offers. What distinguishes CityWorth from Groupon, Living Social and others?
A: CityWorth is friendlier to merchants than some of the other companies. We offer better economics and better payment terms, and we do more than pay lip service to the idea of generating solid repeat business for the merchants who advertise with us. A fundamental part of our program is that every customer who buys one of our great deals is automatically sent a "follow-on" deal — a thank you — that drives the important second visit and costs the merchant nothing.
Q: Does it concern you, Steve, that there are too many companies offering daily deals?
A: We love the fact that there are so many competitors interested in this space. This lets us know we are in the midst of a gigantic trend, a trend that is expected to continue a multibillion expansion over the next few years. We recognize that our strategies and our people will allow us to create one of the best, most sustainable companies on the planet.
Q: How does CityWorth attract compelling offers for consumers?
A: We are always on the lookout for compelling offers. We have both inside and outside sales teams that are communicating with local as well as national merchants to bring great deals. We also allow our members to refer their favorite merchants to us, and we compensate them for these referrals.
Q: Aside from access to discounted deals, are there other potential benefits for consumers?
A: CityWorth members also benefit from the ability to invite their friends to join CityWorth and earn money from building a network of potential customers for our advertisers. Thirty-five percent of all our revenue is paid out to members in this way, and this money — 100 percent of our marketing dollars — stays in local communities, further benefiting local businesses. We realize the real asset of any company is the people — members, merchants and employees alike — and our people are encouraged to innovate, imagine and execute great ideas. Our way of business — incentivized sharing — is the new way of life where people hold on to the value created through their personal networks (contrasted with the value their networks have created for the founders of Facebook, LinkedIn and others), because it really is the people that make the difference.
Q: It sounds like you're in expansion mode. How does someone find out more?
A: We are in super expansion mode, adding a greater number of local and national deals and growing our audience by almost double every month. We expect as many as 2 million members by year end, so we invite everyone to join us as we grow a large international company in which our members have a vested financial interest and opportunity. Your readers can sign up free here at www.cityworth.com/powershop.
• Chris Versace is editor of the PowerTrend Brief and PowerTrend Profits newsletters. Visit them at ChrisVersace.com, or follow him on Twitter @_ChrisVersace. At the time of publication, Mr. Versace had no positions in companies mentioned; however, positions can change.
About the Author
Chris Versace, the “Thematic Investor,” is the director of research at Think 20/20, an independent equity research and corporate access firm located in the Washington, D.C. area. Before Think 20/20, Mr. Versace was the portfolio manager of Agile Capital Management (ACM), a thematically driven alternative investment fund. The groundwork for ACM was laid during Mr. Versace’s tenure as senior vice president of equity ...
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