Next Jump puts pieces together to be a deals powerhouse

Next Jump spent 15 years in stealth mode before it emerged as a power player in the employee discount and rewards business, where it now serves 70 percent of the Fortune 1000. It is now taking its experience and assets over that period to step up as a potential powerhouse in the local deals market.

The New York City-based company, which finally started talking to the media about 18 months ago, is still ramping up its offerings and most people haven’t heard of Next Jump. But it has been quietly bulking up its main product called Overwhelming Offers, which it recently renamed OO.com. The pieces are now falling into place for Next Jump to be a major disruptor in a market that is increasingly being fought over by giants, from newcomers like Groupon to web titans Google and Facebook.

So what separates Next Jump from other deals offerings? It’s a combination of things, from its huge deal volume, a vast reservoir of consumer buying data and an innovative take on rewards and currency. Ultimately, what Next Jump is trying to build in OO.com is less a Groupon competitor and more of a shopping destination that offers discounts on almost anything under the sun.

“We’re very different than daily deal or flash sales sites,” said Charlie Kim, founder and CEO, who started the company as a college student at Tufts. “This is about shopping here first and covering everying you need to buy in terms of selection and prices.”

Deal volume, not a problem

Next Jump CEO Charlie Kim

OO.com has a pretty impressive array of offers with currently more than 17,000 everyday deals listed. Those are spread out over apparel, travel, electronics, pets, and other categories and are sourced from many of the rewards deals Next Jump already offers through its 90,000 corporate employee programs. OO.com also feature local and national limited-time offers. It has partnered with Living Social, Restaurant.com and Grubhub to offer local discounts.

The density of deals makes OO.com a very attractive place to start shopping, whether its for serendipitous discoveries or serious buying. This is one of the issues for daily deal sites and would-be challengers: getting that deal volume up. Next Jump is able to clear that hurdle because it has so many relationships with companies already. And it does with a staff of just 225, most of them engineers.

Data is the secret weapon

Kim said Next Jump’s inside advantage is all the data it harbors from all its interactions with consumers. That cache of information — transaction, consumer behavior and demographic data — over time has helped Next Jump tailor offers to users based on preference and past behavior. That in turn drives a very high click-through rate on deals. Kim said Next Jump has been able to get click-through rates of 25 to 30 percent on email offers that are tailored to individuals.

He said OO.com will be applying more tools to focus its offers in the near future so users who visit the site will see a site that’s organized based on their tastes. It’s this narrow-cast approach that will determine winners and losers, said Kim, and it will be driven by good data, he said.

I agree that it’s not enough to offer deals at a steep discount. It’s got to be increasingly relevant for consumers. You’re seeing that happening more now with things like American Express’ partnership with Facebook but there’s still a lot more that can be done to make offers more meaningful to users.

Points done right

One of the interesting components of OO.com is its take on reward points. OO.com offers what it calls WOWPoints, a reward on top of purchases that can be used to pay for goods on the site. What’s cool about this is that in addition to being able to pay for things with the points — at a conversion of 1 point per cent — retailers can offer multipliers for points as a discount. So Sony might offer free shipping on a TV, not a great deal, but then will throw in 2x points for every dollar spent.

That allows a merchant to entice users with a reward without appearing to be a deep discounter, something that some brands shy away from. Users may not see a dramatic 50 percent one-time discount but they’ll be encouraged to still buy a product from a vendor because of the points the company is willing to reward them with.

Kim said increasingly, daily deals and other reward programs are often encumbered with restrictions and limitations that undercut the appeal of the offer. WOWPoints are not restricted and so consumers, if they stick around long enough, find real tangible value in shopping with OO.com. A user’s status within OO.com can also help accelerate the rate at which they earn points. Kim said 88 percent of the sales on OO.com comes through purchases with reward points attached instead of big daily deal offers that feature huge discounts.

Still working things out

OO.com is still very in beta and Next Jump isn’t looking to start ramping up its marketing until the fall, though it will rely mostly on viral distribution. It is working on adding new features like family points and group buying and is also planning to launch a couple of category-specific mobile apps. The company has come a long way in a quiet fashion and has managed to pull in $ 45 million in funding from angels, including early Google investor Ram Shriram. There has been talk of an IPO at some point though the company isn’t commenting.

But keep an eye on Next Jump. It’s got a great source of deals, a smart way to personalize them for people and a solid way of enticing shoppers with reward points. The company still has to prove it can be destination for users and we’ll have to see what kind of marketing push it does. I also wonder how merchant loyalty will hold up over time. They fund the WOWPoints themselves but users can use them on anything they want. It’ll be interesting to see if this communal reward program will provide enough individual benefits to businesses.

A lot really depends on getting OO.com to be that first stop for shoppers. Kim said that 76 percent of employees in its corporate reward programs turn to Next Jump first before they shop elsewhere so it’s shown that it can be a go-to resource for consumers. It will be harder for everyday consumers who are hearing and seeing marketing pitches left and right. But I think if Next Jump can just get that momentum going with consumers, it’s got the pieces in place to be big, very big.

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