Profile Of A CEO: Loren Bendele, King Of Online Coupons
A colorful cafeteria monopolizes a huge portion of the space, with a blue counter and a few green televisions mounted on the wall. It’s not unlike a kindergarten cafeteria, with benches dominating the area.
Employees stare at their beaming blue screens except for the two employees enjoying a game of table tennis. It’s almost a scene from “The Social Network.” A young, casually dressed man escorts a visitor through a dimly lit hallway to a bright room, where they’re greeted by Sugar, the office dog. This is how things work in Loren Bendele's office.
As he had warned in an email, “I’m dressed pretty casually today. Actually, I’m always dressed casually.” Bendele wears jeans, a long-sleeved polo shirt and tennis shoes. His brown hair is combed neatly, while his face is stubbly. He looks as if he is going to a baseball game, but somehow his attire fits the feel of the office.
Bendele is the CEO of Savings.com, a company that combines coupon offerings with social networking and crowdsourcing to create live lists of online discounts on services ranging from automotive to groceries to travel.
The chief exec is 40, but he doesn’t look it. He began his career running a marketing business for Telefrlora, a florist company. From there, he moved to the Dallas office of The Boston Consulting Group where his clients included airline, health care, software and telecommunications companies.
“I also had some fun in my twenties,” he said. “I did standup comedy and sketch comedy.” While joking behind a microphone was fun for a while, he soon realized that founding his new business would give him the greatest kick.
“I really wanted to build my own company, build my own team,” he said, “and started looking around and networking and found other successful entrepreneurs.”
Bendele soon joined forces with four other innovators. “One individual had the URL (for) Savings.com and had a good idea about what to do with it,” he said, “and so I just left my other job and started this up.”
Now his company, which has 90 employees, attracts 5 million shoppers each month. “About a year ago we were at 45,” Bendele said. “So we are a fast-growing company and we plan to keep on growing.” Stores like JCPenny, Kohl’s and Macy’s dominate the website, offering consumers two-for-one bargains and some major discounts. Less conventional discounts include sites like Horse.com, Wine.com and Awe Spa.
Perhaps because of the troubled economy, the online coupon industry is booming. “We benefited from the economy,” Bendele says. “When the economy tanked in the end of 2008, more consumers were looking for deals then ever before and merchants were hungry for sale so we were there at the right place at the right time offering both consumers and merchants what they need and want.
“I don’t think we were planning or hoping or anyone suspected the economy would take the hit it did in 2008,” he said, “but it was a factor when we were creating the early pitch that it would be a recession-proof business.
“There has been a shift in people’s mindsets” Bendele continued. “I think The New York Times published an article that ‘value is the new black.’” He scrolled through his computer looking for the article. Some consider it trendy to be value-conscious. The shift has been a tipping point for online “coupon clipping.” Consumers might once have been embarrassed about using coupons, but it has since become a trend with more cachet than grocery store coupons ever mustered.
More and more young entrepreneurs are following in the footsteps of Bendele and Andrew Mason, CEO of the online coupon giant Groupon. Last June, 27-year-old Kenny Kadar started an online coupon website called Night Tap. “We are a Groupon meets Urban Daddy for nightlife type of website,” Kadar said. “We offer those type of group coupon deals, but that are focused exclusively on nightlife.
“The goal,” he said, “is to improve the nightlife experience for people who like to go out, and also for the venues and the vendors to be able to increase their exposure and their relevance in their sales.”
The development of online coupons and daily deals sites has had a major impact on the way consumers shop. A study done by Marketingtrends.com found 66 percent of consumers will use online coupons for at least 25 percent of their purchases over the next 12 months.
Among that 66 percent is Bahar Minoo, a property manager at 4M Investment who uses online coupons about once a week “on everything from spas to fitness classes to restaurants.”
Minoo admitted she is on her computer and smart phone every day looking for the next best deal. “I check what the deals are everyday and if it’s a deal that I like I log on and get it from my phone,” she said. “It takes a matter of two minutes because they have all my credit card information stored.”
While consumers like Minoo land big bargains, new businesses are reaping the benefits as well. Alisa Gonzalez, owner of Cardio Barre in Beverly Hills, said she owes her livelihood to Groupon. “We are a brand new business,” she said. “We only opened at the beginning of June, and so for us it is really what launched our business.” Gonzalez offers consumers ten fitness classes for $39 — a steal when most fitness classes cost at least $25.
Not everyone is such a fan of online deals. Utpal Dholakia of Rice University interviewed 150 businesses that had signed on for Groupon promotions. A third said they did not make any money from them, and 42 percent said that they would not do another daily deal.
In an interview with Economist.com, Dholakia said the reasons behind such discontent are numerous. “Businesses grumble that the deals attract mainly bargain-hunters who do not spend more than the coupon’s face value and do not become repeat customers. Although these problems may be fixed by designing the promotions better, there are some longer-term worries. Studies have repeatedly shown that price discounts erode brand value.
“They may be good for giving businesses some exposure,” Dholakia continued, “but the benefit of this is likely to wear off after a few such promotions.”
Back at Bendele’s office, Sugar is scratching at the door, anxious to get out into the mild November sun. Bendele sums up where he sees his company going in the next few years. “We were just ranked the seventh-fastest growing company in Los Angeles by the L.A. Business Journal and one of the top 200 in the country,” he said. “I want to continue to grow it by getting more people coming to the site. We have had 3 to 5 million visitors a month in 2011 and so we would like to take it to 20 million, 30 million visitors a month.”
Bendele is talking global expansion. “We have launched in the UK last year and that’s growing. Lastly, I want to launch Germany and France in 2012, and continue to expand from there so in five years we would probably be in 20 countries with 50 million visitors a month.”
He’s confident the company can reach that stratum of business. “It’s an ambitious goal but I think it’s doable.”
Reach Contributing Writer Nuha here.
Editor's note: The information in an earlier version of this article about J.D. Gantes and Synergy Pacific Management was incorrect. Gantes is an employee of Synergy Pacific Management. Synergy Pacific Management is a company that provides contract services and has no ownership in any restaurants and is not family-owned.
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