Mark Pearson, the British entrepreneur at the cutting edge of the coupon revolution, tells us how he's putting his coupon business ahead of the competition.
Seventeen million unique visitors a month. £10m in sales. £9.6m of gross profit (£5m of which is his salary). Forums and Facebook alive with praise and bile. Meet Mark Pearson, the entrepreneur at the cutting edge of the coupon revolution.
You need a new book, phone, dishwasher. You’ve visited the review sites, you’ve compared the prices, your research is complete. Now you’re ready to buy.
At the final moment, just as your credit card is hovering, one last opportunity presents itself. “Enter your coupon code here.”
All that research, and there’s still the chance to save more, with a coupon.
Whether you realise it or not, you’re about to become the latest customer of 30-year-old Liverpudlian Mark Pearson, one of Britain’s most opinion-dividing entrepreneurs.
From a standing start – his Camden bedroom in 2006 – Mark Pearson has built MyVoucherCodes into a business to make even seasoned investors’ eyes water. Judges at the Real Business/CBI Growing Business Awards (including VC überlord Hermann Hauser) choked on their coffee when Pearson talked about Markco Media’s numbers. Yes, he really did say 97.7 per cent gross margins (sales £9.9m, gross profit £9.6m).
At a time when most UK businesses are fighting to avoid profit erosion, clinging onto increasingly price-sensitive customers, Mark Pearson has created a money engine.
More than one in five consumers say they won't go to a restaurant unless it's offering a discount voucher.
MyVoucherCodes is a classic affiliate business: every time a customer makes a purchase using a coupon code, or clicks on a link from one of Pearson’s money-saving websites, he receives a commission from the retailer.
Customers save money, retailers generate more sales, and Pearson gets a cut.
Retailers keep track of customers by providing voucher code websites with links that include unique, trackable embedded coupon codes.
The size of the cut depends on the sector: from three to five per cent in electricals to 30 per cent in fashion sales. For retailers, voucher code sites introduce a new source of price-savvy customers. This is the factory-outlet model brought online.
Bargain-hunters abound. Across his sites, Mark Pearson gets around 16.5 million unique visitors a month, 86 per cent of which are organic. Only six per cent of traffic is paid-for, and the rest comes through social media and direct hits.
Operations of this scale require serious vision and determination. Mark Pearson has buckets of both – and more. Behind the tall, youthful, friendly air is an aggressive entrepreneur who’s not afraid to take big risks and ruffle industry feathers.
Everything about the 80-employee Markco Media bears his imprint (including the name). He’s the single shareholder and director, he’s the company’s obsessive heart. “I wake up first thing in the morning and live and breathe the business,” he says. “But it’s hard to get other people to replicate that.”
Although he may say he wants to take a backseat role, you sense it won’t happen easily – or quickly.
Like all driven entrepreneurs, he’s never satisfied. “We’ve got some bloody good people,” he says. “But I always push them; I always want more.”
Last summer, that zeal tipped over into what many saw as unacceptable practice. One of his companies, group-buying site Groupola, went public with a seemingly irresistible offer: 100 new iPhone 4 phones for £99 each. Surprise, surprise – the servers crashed. Not the end of the world, you might think, but a group of employees then tried to patch things up by posing as happy customers. In a social media world where people talk freely, this was a big mistake.
The Office of Fair Trading eventually weighed in, censuring Groupola for having “bait priced” consumers, luring 15,000 customers to register, but only actually selling eight phones at the bargain price.
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