Social-Focused Group Deal Provider Dealpair Offers Alternative to Facebook Deals

DealPair is a Facebook application and web site that allows users to browse personalized group deals and invite friends to buy them through Facebook. Businesses can set up their own offers at a relatively cheap rate through a self-serve merchant dashboard. Dealpair is currently in beta, and is therefore only offering deals in the San Francisco Bay Area.

With Facebook launching its new Deals feature which is free for merchants and rewards users for checking in physical locations through Places, businesses will need to decide how to balance the different promotions to attain the highest return on investment.

Group deals have surged in popularity this year, with Facebook becoming a primary channel for deal distribution. Top group deals provider Groupon makes it easy to share with friends, while competitor Living Social rewards users if three of their friends also buy a deal, incentivizing sharing. Social marketing services company Wildfire created a group deals Page tab app, allowing Pages to run their own promotions.

And now Facebook is offering a location-based promotion which spreads virally through the news feed when claimed and doesn’t force users to buy up front. Deals requires less additional advertising, and businesses don’t have to split revenues with Facebook like they do with Dealpair (who takes 10-20% of the deal price), Groupon (50%), and Living Social (30-50%). However, Facebook Deals doesn’t immediately bring in cash like third-party group deals.

The promotions may settle into their own niches, though. Facebook Deals may prove more lucrative for businesses with wide appeal who are looking for exposure and repeat customers. Meanwhile, group deals may be better suited for big-ticket retailers looking to lock users into large purchases, and businesses seeking to discount extra inventory such as surpluses of a certain good, or low traffic during non-peak hours or days.

Dealpair’s Differentation?

Dealpair, for its part, is built on top of the Open Graph instead of merely tacking it on. Users log in through Facebook or simply give permissions to the Facebook app, reducing registration friction. When users find an interesting group deal, they only need to enter their credit card information to buy it. They can use a multi-friend selector to send friends application invites to view the group deal. The Facebook app also publishes a daily deal to the user’s stream, which could help users find people to buy and thereby lower the deal’s price. However, Dealpair isn’t explicit about it posting to a users stream every day, so some might consider this spammy.

After sufficient use of the app, Dealpair apparently begins increasing prominence of deals which match a user’s behavior. Dealpair is also running an incentivized referral program, where users get an entry into a drawing for an Apple TV for each five invites to the app that they send to friends. While this could be in violation of its promotions guidelines and developer policies, which prohibit incentivized use of Facebook’s communication channel, it should help the app to grow from the 352 MAU it has acquired since launching October 10th.

Despite its focus on social features, Dealpair may be too late to capitalize on the boom in interest in group deals. One way the app could differentiate itself would be by showing users deals that match their Likes and interests, for instance yoga gym memberships if they Like yoga, or beauty salon specials if they Like cosmetic brands. While significantly cheaper for businesses than other group deals, its lack of audience and the new types of promotions available will make it difficult for Dealpair and other followers to succeed.