Poggled’s Chicago Success No Drunkard’s Walk

It didn’t take last Groupon’s S-1 filing last week to validate the existence of all these Groupon clones. But if there is one thing that Poggled founders Joe Matthews and Sean Strother emphasized, it’s that they’re not running some flimsy daily deal operation. Poggled is no Groupon clone.

“The model that Groupon and LivingSocial have is much more of ‘I’m going to give you a great experience at this venue, and I’m going to give you this wide window [of time] where you can redeem it’. […] And the model that Groupon is using is obviously fantastic, it works for them, but it doesn’t work so well for the nightlife space.” Said Matthews, “Ours is a different model.”

On the customer side, three things separate Poggled from the rest.

Poggled deals are “evergreen”, which means that instead of being offered for one day or a few days, deals posted on Poggled can last for months. For example, the “$15 for Minnieburgers & Draft Beer” deal saves buyers 50% at P.J. Clarke’s.The deal was posted back in April, but expires in October.

Let’s say I buy that deal, and I get my burgers and beer on the cheap. I can bring a friend along and (s)he can use a coupon from Poggled too. “You can go out with ten friends and use ten deals.” One can usually use only one Groupon per group; Poggled’s service has a huge edge over other daily deal sites.

The final feature of Poggled deals offer to consumers is the ability to buy the same deal multiple times. So if I like my P.J. Clarke’s, or find a really nice spot for first dates, I can stock up on deals to use every time I go until the deals expire. Groupon and LivingSocial are one-shot deals.

Businesses don’t issue coupons because they like to lower prices. They don’t. “Our product is built to support the nightlife space, which is characterized by wide swings in demand. Bars and clubs, they have certain times of the week where they make most of their money, and that’s usually Friday and Saturday after a certain time. And those are the times they can’t afford to discount. If the party really gets started at 2 AM, and we can get people into the bar at midnight, that’s two extra hours of business for the bar. They have an incentive to run that deal over and over again,” said Matthews. “Bars and clubs don’t usually like doing Groupons because everyone uses them on Fridays and Saturdays at 2 AM.”

Poggled started offering deals in March of 2010, after a year’s worth of market research. Their current deal structure was perfected three months later, in June of last year. “We’ve worked with over 120 bars and clubs in Chicago. We’ve sold thousands of tickets, and people keep buying over and over.”

With $5.6 million in Series B funding from Groupon investor Lightbank and Tom Grossi’s New Enterprise Associates this April, Poggled now has the resources to expand beyond its Chicago home. Poggled is expanding into “two big markets”, Washington, DC and New York City, and two smaller ones, Denver and Milwaukee.

“One of our biggest challenges to expanding is that the bar and nightclub scene is an archaic business. It’s very much on paper. Liquor reps come in every week. So little of it is online,” said Strother. “But we’re offering them an easy way to get more customers, and we’re helping them go beyond newspaper ads.” Poggled turns marketing into a revenue source. Matthews said, “We’ve spent a long time getting the mousetrap right, figuring out what makes people go to the bars, and how to position that to them, and how to get customer acquisition costs lower than their lifetime value. Once you prove that equation out in Chicago, it’s just a matter of expanding to other cities.”