By Chris Lee

For companies at a loss as to how to engage with social media for their own marketing needs, or indeed want to build upon existing social media programmes, help could be at hand.

LivingSocial describes itself as a “social commerce platform” used by hundreds of UK businesses including London Zoo, De Vere Hotels and Toni & Guy. In its first five months of activity in the UK it claims to have delivered more than 30,000 paying customers to participating businesses and saved customers more than £2 million.

LivingSocial’s UK managing director is Peter Briffett, and NMK spoke to him about how the site works and the prospects for social media marketing in 2011.

Explain to us what you mean by ‘social buying’. How does that work?

Social buying is when a group of individuals come together (predominantly through social networks) and between them broker or take advantage of a great deal on an item because of the volume of people buying together.

Companies like LivingSocial encourage the social aspect of group buying by making the deals more attractive and rewarding subscribers who share information about deals and encourage their friends to sign up and buy. This sharing of the deal via social networking channels helps to create a ‘word-of-mouth’ buzz for each deal and extends the promotion beyond the core-subscriber lists.

In terms of the LivingSocial Daily Deals platform, we try to offer our subscribers exciting and new things to see and do in their city every day, so deals have ranged from fish pedicures to flight simulators.  Each day a merchant runs a deal with between 50 and 90 per cent off the usual price.  The deal is available to buy for a 24-hour period but can be redeemed for up to 12 months. Subscribers who buy the deal receive a voucher for that deal. There is no upfront cost to the merchant and for every deal bought they get a paying customer through their doors.

Would you class LivingSocial as a ‘geosocial network’ as well?

At present we offer local deals to local residents and in some cities where we are hyperlocal we offer great deals in specific neighbourhoods. Subscribers are not automatically alerted to deals on their mobile phone as they move into a particular street or neighbourhood. In addition, our subscribers can also opt-in to receive information about offers in cities they may be going to (for example on holiday). 

Have you got a case study of a business that has benefitted through LivingSocial?

ZSL London Zoo ran a deal with LivingSocial offering admission to London Zoo for £8, allowing consumers to save 60 per cent. The deal was a huge success and sold 3,683 tickets in just 24 hours. Most importantly for London Zoo, on average visitors to the zoo spent almost double the cost of the entry ticket on food, drink and other activities once inside.

Metro Golf London ran a deal with LivingSocial and was impressed at the level of repeat customers.

Phil Wood, general manager of Metro Golf, said: “In addition to generating over 180 sales for our golf coaches, which would normally have taken us at least a month to achieve, LivingSocial also generated over £2,000 for us which was very welcome in what is our quiet summer period.”

Where is social buying going to go in 2011?

We are just at the very beginning of this business model. Great daily deals in cities across the globe, family deals edition and our escapes ‘getaway’ platform are just some of the new additions that will be rolled out globally over the coming months. Expect more really exciting developments in 2011.

As merchants become more experienced with social-buying as a marketing platform I think we will see them looking to develop ways to continue online relationships with new and prospective customers.

More generally, I think we will see more big name brands looking at how they can capitalise on the interest in social buying. 

Finally, there will be a shakeout in the number of players in the market.