Bellevue Business: Room for Another 'Deals' Site

In a world full of coupon websites, Kudos Community is a new Bellevue-based deals website with a twist.

The sites aims to come up with a pay and revenue model that differs from many popular deal sites, and aims to benefit charitable organizations, said Carl Lombardi Sr., who founded the site with his son, Carl Lombardi Jr.

The Lombardis are no strangers to nonprofits. For 10 years they operated Bellevue company Fieldhouse Inc., a company that helps nonprofits promote themselves. About two years ago, the Lombardis began working on Kudos, with the aim of benefiting consumers, businesses and nonprofits, the elder Lombardi says.

The site launched recently in Bellevue, and the company is eyeing five additional locations, mostly on the West Coast, to launch this year. It’s also developing a mobile application that could allow businesses to offer coupons that can be redeemed with the mobile device, Lombardi says.

The structure of the site is quite different from other “coupon” sites, Lombardi says. Unlike other coupon sites, Kudos doesn’t require consumers to buy into the deals upfront, and its fee structure for businesses is based on a per consumer fee, rather than a percentage of the deals redeemed.

Lombardi said those sites are similar to gift-card sellers. Kudos doesn’t actually sell coupons, but rather sells space on its platform to local businesses to advertise a deal, he says.

With the Kudos model, the aim is for businesses to keep more of their profits than with other types of coupons, Lombardi says. According to Lombardi, with other coupon sites, participating businesses can have fees of as much as 50 percent of the revenue generated by the deals.

In addition, customers can choose more than 1 million charities worldwide to receive a percentage of the Kudos revenue they generate. When a customer signs up with the site, he or she can choose up to three charities that will benefit from his or her activity, Lombardi says. Kudos intends to allocate 25 percent of its revenue to the charities, he says.

Businesses have flexibility to decide how long their offers stay on the site, and the transactions from the coupons or offers remain strictly between the consumer and the business, Lombardi says. Businesses pay a fee for distribution of their offers depending on factors such as the number of members targeted, demographic specifications, length of time the offer is available on the site, or being a featured offer on the site. Lombardi says the cost to businesses can range from 4 cents to 10 cents per person depending on these options.

For consumers, there’s some level of privacy maintained as well, he says. While individuals do have to provide a valid email address, customers don’t necessarily have to provide personal information, though the more information a person shares, the more tailored the offers can be.

Kudos, which is located in the same office space as Fieldhouse, has eight on-site employees, and contracts with others. Lombardi says the company will hire additional salespeople as the business expands to other cities.

Another benefit for businesses, Lombardi says, is they can streamline their marketing efforts by encouraging members of their direct mailing lists to sign up at the site. The businesses don’t pay the standard per-customer fees for their existing customers, saving the business money.

“We want businesses to see us as a great marketing tool for customer retention,” Lombardi says.

Lombardi says that Kudos is also working with charitable organizations, which can encourage their supporters to sign up with the site, helping Kudos to grow while benefiting the organizations. Charitable organizations can register on the site as well, giving them additional potential benefits such as being identified as featured charities on the site.

“Our vision is to build a marketing platform with a balanced set of benefits. We felt that if we could accomplish that, it would self-generate growth, starting in the Seattle area,” Lombardi says.

Editors note: For the record, charitable organizations do not have to pay to be on the site. The pay structure has also been clarified. This article has been corrected.