Coupon Cat, one of Northwestern’s newest business ventures, is giving students the chance to experience the best of Evanston at deep discounts online. With weekly deals students can shop, eat and treat themselves to their favorite local retailers.
If this story sounds familiar it’s because it follows an oft-repeated formula. Yes, to put it plainly, Coupon Cat is another Groupon imitation. But the founders of the company don’t want that to deter students from what they believe will be a much-needed take on the original business model.
The founders of Coupon Cat are aware that the inspiration for their business isn’t currently the most well-regarded. “These days we see that Groupon is going down the slope,” says Thomas Kim, a Weinberg sophomore. But this isn’t necessarily a setback. He and the others involved in Coupon Cat hope that with their reworked formula, students will be less influenced by Groupon’s shortcomings and more open to trying something new. The founders will see just how successful the plan will be when they launch their first deal with Beck’s Books on Nov. 23.
“With any of our new businesses, even with our current businesses whenever we try and enter something new or start a new strategy, we definitely have apprehension,” says McCormick senior David Jin. “But I think if we do enough research where we are convinced that there’s a market for it and that it’s sustainable, then that’s something that we’re gonna take a stab at.”
The brainchild of Communication sophomore Andrew Lim and junior Gregory Budd, Coupon Cat is officially kicking off at a time when the coupon-sharing industry spawns Groupon knockoffs from Living Social to Gluten Free Deals on a regular basis. The combination of negative press for Groupon and the abundance of its imitators didn’t initially make for an enthusiastic reception. Besides, Groupon’s stint in Evanston had been a flop.
“Groupon and Groupon-like ventures are nagging these businesses so much, and they haven’t been producing positive results for them, especially in Evanston,” says Lim.
But the basic vision of developing a sound relationship between Evanston businesses and Northwestern students was too good an idea to pass up. They knew if they worked out some of the most pressing problems with Groupon, they would be able to make a solid Northwestern-centered business that could accommodate both Evanston retailers and their most important patrons, Northwestern students. It was simple enough — it just hadn’t been done right.
At the heart of the reworking of the Groupon model was more respect for retailers. This means no hassling businesses then expecting them to cough up enormous discounts for students. The discounts will be significant, but won’t totally break the bank for Evanston retailers. Also gone are the the days of pesky lockout periods for businesses in which they had to work exclusively with that particular coupon-sharing business for an allotted period of time. By giving the businesses room to breathe and asking what they wanted out of a relationship with Coupon Cat, the students were on their way to taking the stigma out of coupon-sharing groups.
The students entered their idea in the Northwestern Student Holdings business idea competition, winning over the judges with their extensive market research and carefully crafted business plan.
“It is really similar to Groupon in terms of how they offer the deal but I think it differentiates itself in terms of how we treat both the customer and the business,” says Jin, the NSH director of business development, who helped mentor the students.
But getting to that point was not without plenty of constructive criticism.
While intrigued by the student’s passion for the Coupon Cat project, Verinder Syal, a chairman of the NSH board, definitely had his reservations. When the idea was presented to him he thought, “Groupon is there so we know the model works. What I don’t understand is what they would do differently from Groupon.”
The students were able to explain the differences to Syal, but that wasn’t enough - they had to to demonstrate Coupon Cat’s potential for success in a real-world setting.
Syal took the students to Olive Mountain to talk to the owner and customers with a simple goal in mind: “Prove to use that someone will trust in your idea.”
Not only did they win over the approval of the Olive Mountain patrons, but based on their on-campus marketing efforts, they are appealing to students as well. Judging by informal and formal surveying of students, the founders believe that there is positive reception for their new twist on coupon-sharing.
Coupon Cat's first deal is for $10 for $20 of Beck's merchandise. The founders want students to take advantage of this deal before winter break so that students can bring gifts for friends and family back home.
“We’re using Beck's for first deal just because we thought it would be something fun for students to do for the winter holidays,” says Budd. Some ideas the founders have floated for future deals include Cozy Noodles & Rice and Joy Yee’s Noodles. “I think that’s where there’s a good opportunity right now mostly because students purchase from different restaurants so often,” he says.
“What came out of our research was that students go to the same places over and over again,” Lim says. “Through our business we would be able to introduce the businesses to students at a cheaper cost and even give businesses an opportunity to appeal to students in a way that guarantees them customers.”
Most importantly, Coupon Cat is a service created by students for students, so the brains behind the company have been able to think like their customers. The deals will be based in Evanston, unlike the Groupon model that the entreprenuers believe catered only to the average adult Chicagoan. And they mean it when they say it’s a service for students — If you’re not a Northwestern student you don’t get access to the Coupon Cat system.
Coupon Cat is just testing the waters, so huge profits aren’t the most pressing intent. As student entreprenuers, Lim, Budd and Kim are treating Coupon Cat as a learning experience. If they can get students a few solid discounts at their favorite Evanston retailers,
“My only wish is that they really enjoy our service and enjoy what we provide for them,” Kim says. “And I hope no one gets hurt from our business model…like Groupon.”