In the mid – 1880s John Pemberton, a local pharmacist from Atlanta, Georgia devoted most of his attention to a three legged brass kettle in his backyard. He was perfecting his "French Wine of Coca", which coincidently turned out to be the popular “soft drink” we know today - Coke.
This was not apparent at the time. Coca-Cola sold for only a nickel and in its inaugural year, Pemberton’s elixir was still unfamiliar and unprofitable, and the company operated at a loss. The life-style brand of Coca-Cola that we know today, with a market cap of over $155 billion, would not have been realized without the right marketing approach.
In 1887, Asa Candler, already an established businessman, purchased the Coca-Cola Formula from its inventor John Pemberton for $2,300. One of the first decisions Candler made after purchasing the company was to offer Coke at a discount. He was confident the drink was good enough to win customers over.
In 1888, Candler started distributing a “free drink” card, which allowed new customers to try the unfamiliar soft drink. Historians considered this card to be the first coupon. Inevitably Candler found success in incentivizing everyone to try his product risk-free.
By 1913, Coca-Cola had redeemed 8.5 million “free drink” coupons, it was a huge success. The ability to attract new customers to the brand by incentives proved vital for Coca-Cola’s goals. Candler made millions from his investment, in 1919 his sons sold the company for $25 million. Historians argue that the explosive success of Coca-Cola was largely due to Candler and his aggressive marketing tactics.How can Coke’s early lessons apply today?
The moral of the story is that incentivized marketing, if done properly, can make a business thrive. Due to the proliferation of the web, distribution of such incentives are both effective and far reaching. However, the incentive creation process is often technically confusing, slow, and costly and generally requires an inconsistent 3rd party.
Today, Seattle merchants are beginning to use a local Start-up called knotis, pronounced “noh-tiss,” to roll out their incentives. knotis is reviving the coupon by taking Asa Candler’s marketing strategy and infusing it with 21st century tools. They are calling this new take on coupons an Online Social Incentive and merchants can now easily create as many as they wish at the low monthly cost of $14 per month. Merchants can share these self-generated OSI’s in online banner ads or through their social media channels like Facebook and twitter.
The goal of these incentives is simple: to attract new customers and to reward loyal ones without cutting into margins. knotis is making the design and distribution of incentives from start to finish elementary, efficient, and affordable for any merchant. In addition, with a knotis account a merchant can see all the analytics around what they are selling and to whom. knotis in effect replaces the “middlemen” in creating online offers placing the relationship between business and consumer back in the hands of the business owner.
Upon arrival at knotis.com a consumer will be offered great savings from a variety of local merchants. On the surface, knotis looks like “just another daily offer site,” some offers may be purchasable, others share-worthy to friends, and some just interesting. But if you pop open the hood you’ll discover why this startup is becoming a merchant favorite.
What consumers don’t readily see is that the incentives are being offered and created in real-time, edited and managed directly by merchants looking to either move inventory or entice customers to visit. The beauty is that a merchant may create as many unique, varying or consistent promotions, coupons, offers, or incentives as it takes to get customers interested. “Even if my offer does not sell out I still win by building buzz around my store,” says Jessi of Born To Run in South Lake Union.Why knotis at all?
knotis is doing business differently and intelligently by charging its merchants a low, flat-rate of $14 per month, and if the merchant doesn’t make a sale during the month, they are not even charged! “That’s just company culture,” says 28 year old founder, McLean Reiter. “We want to help local businesses thrive!” Iofferistic? Maybe, but you haven’t even heard the half of it.
After all, the founders understand merchants know their businesses best and therefore should be able to run promotions when they make the most sense and on their own schedule. This allows maximum savings to be passed to the consumer, with no lag time while protecting the business from overloading their staff and inventory.
Remember Asa Candler, the man mentioned above who launched Coca-Cola? He encouraged his sales team to know the customer and to know them intimately. “Know them well. Have a daily tab on them. If a record of purchases is kept and tabulated at all times, daily, it enables you to intelligently analyze and to describe and to prescribe remedies.”
With the power of the Internet and the adoption of social networks, knotis takes Cadler’s advice and turns it into a valuable yield management tool. knotis bridges the gap between consumer and business by providing both a bold new point of sale but also a powerful merchant dashboard. Even the smallest promotion campaign analytics become valuable data points.
As a real-time, online social incentive platform, knotis allows businesses to manage and measure the effectiveness of the incentives, promotions, online coupons and specials. Since knotis only collects a 3% processing fee (the same as using a Credit Card terminal), a merchant is free to exercise true discounting. Their early customers love this, “If I decide to create a worthwhile promotion I need to use all of my margins carefully,” says Jesse Davis from Street Bean Espresso “there’s no commission nor lag time for my promotion. It reaches my customers, fans, or friends when I’m ready!”Why knoits Now?
US coupon usage is set to increase by 150% from 2009 to 2014 and redemption value will jump from $8.3 billion to $22.3 billion. With such industry growth, knotis is poised to offer relevant service in the space. knotis is betting on local businesses and the expectation that communities will support buying local through the knotis platform. It’s an ultimate win for sustainability and shop local enthusiasts. And at $14 a month, even John Pemberton and Asa Candler in the 1880s could have afforded the knotis subscription.