Spinzo CEO Emmanuel Elmajian, who grew up in the small business restaurant world in New Brunswick, has come to Toronto to shake things up with his new startup.
The former McKinsey and Google employee says that he knows if you give a massive discount, you are going to attract customers that are only going to come back for the discount.
That’s why Elmajian believes his New Brunswick based startup Spinzo is a better way for small business to offer deals in an age where traditional mediums for small business advertising continue to disappear. He says that you may be able to create a Facebook page or a Twitter page, but it is difficult to promote your business uniquely on those mediums with so much noise.
In the traditional group buying model, many companies have been burned by the losses they endure by providing deep discounts. Instead of taking a 50% commission in most cases, Spinzo is taking a 15 to 20% commission, undercutting group buy companies. But Elmajian does not believe he is necessarily competing with the group buying companies because his model is different.
Spinzo caters to clientele that want quality experiences at a fair price. He believes that no merchant should lose money when they offer a promotion unlike group buying deals.
Elmajian expects they are competing more so with online ticketing companies as they offer a sliding pricing scale based on the number of people joining an event or experience. That is something the popular ticketing site currently does not allow for.
Spinzo is offering a dynamic pricing mechanism where one joins the deal and rides the price down further as more people join. Potential purchasers can put in their payment information and have the deal processed only if it reaches a certain price.
This keeps most merchant partners happy because they can lower their fixed costs if more people are expected to come to a restaurant or event, for example.
Elmajian believes this model works especially for experiences and events because it is difficult to sell tickets without hiring promoters or running advertisements. While Spinzo is starting small, they do believe in more than just one-day experiences such as monthly redeemable ones.
The company isn’t so concerned about traffic like the group buying companies are because they will rely on positive word of mouth. They currently have a community of buyers that is nearing 3,000 people. The community will be linked to other side deals as well.