DealMelt Business Vision Version: 4.

0 Date: March 10, 2011

Problem Statement
Why are small to midsize business loyalty programs and IT marketing strategies so fragmented and less effective? How can they get out of the prohibitive cycle of generating costly, low return physical coupons, exorbitant PPC campaigns and local print media, and become profitable? Why is 1%-4% Conversion considered an expected return on online coupons when with better analytics, and business intelligence, it could well be far higher? With the right solution, on the Mobile platform, this is possible.

Application Overview
What does the solution do? DealMelt.com is a mobile application, with an element of social networking, rebate/savings offerings, detailed business analytics, and CRM with 3 ultimate players: a. Business b. Direct Customer c. Potential Customer A Direct Customer frequents a Business and its establishment. The Business, by opting in to the DealMelt network, implicitly offers the Direct Customer a Rebate/Coupon and the ability to track all purchasing behavior via DealMelt technology. Additionally, the Customer can mention the business on their Social Network of choice (Facebook and/or Twitter) and the exact deal that they have utilized is Shared and can be used by any User within their audience. A Potential Customer(s) could be anybody that views the Shared Coupon on the social networks mentioned. By clicking on the Coupon, the Potential Customer will be instantly provided the SAME rebate/coupon that the Direct Customer was. This rebate/coupon can be availed by the Potential

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

Customer only upon visiting the Business, and only one can be utilized per visit. They are now, a Direct Customer.

What makes DealMelt Unique? What is the market differentiator?

DealMelt enables SMBs to have an immediate online business presence with a fully functional dashboard utilizing the mobile ecosystem. OCR and QR technology utilization, or POS Integration with the aforementioned, is the true differentiator of DealMelt. Currently, there are apps, systems, and solutions which allow businesses to track their user purchasing behavior at the subtotal level; however this is limited to big players (Grocery store chains, Fortune 500s). That too, their thresholds for deals are largely based on subtotals and dollar amounts spent. DealMelt analytics allow for SMB/Mom and Pops to literally view, sort, and target campaigns based on precise purchasing metrics of their customer base, at the item level. Evidenced in the following Use Cases: Use Case for Deal Utilization: a. DealMelt signs up Bobs Coffee Shop and they become a vendor. b. Steve checks in to Bobs Coffee, downloads DealMelt on to their I-Phone. c. Steve avails their Free Cookie with Large Coffee Deal, shows to Vendor, and makes purchase of $4.29 (retail value $6.29). d. Steve is provided a receipt.

Use Case for Customer Analytics and Loyalty Track/CRM: a. Steve, using his mobile device, scans his own receipt because DealMelt has a loyalty program. b. This scan OCRs the receipt/QR Code, and generates into Steves User account, a record of: Business Account Name (Bobs Coffee) $4.29 total purchase Date/Time 2

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

Item(s) Code and Prices c. Steves analytics now show total aggregated purchases, per Vendor.

Use Case for Vendor Utility of Analytics: a. Vendor logs on to Management Interface. b. Management interface displays Steves analytics. It can aggregate, ex. that Steve has shopped 4 times in the past 60 days and spent $54.89 to date. c. Management, at any time, can generate a custom DEAL to Steve (using threshold logic such as $10 COUPON at $50 threshold) d. Management can further data mine and assess Steves shopping habits at the item level (3 Roast Beefs, 1 Turkey Avocado) and generate coupons based on this data and determine predefine thresholds.

What systems does the solution integrate with or replace? DealMelt as an application that involves a variety of interfaces: The Business has a User Interface to manage their account, their offerings, their analytics The Customer has a User Interface to check in to Businesses, receive and redeem coupons, scan receipts (OCR/QR Technology) from businesses which add to their Loyalty Analytics. The application needs to integrate with Facebook Connect and Twitter API platforms to allow for the sharing of coupons.

The solution enables the Business to: Replace many of its fragmented, expensive, and inefficient marketing measures. To increase coupon utilization rates, to increase profitability 3

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

To harness existing web and mobile device technology to be more connected to customers To provide highly targeted, and therefore higher return, loyalty rewards To be socially relevant via the sharing of coupons, all for less expensive means than existing offline options, and highly generic and expensive online options. The solution automates loyalty tracking (vs. outdated physical punch cards), word of mouth (via social networking), targeted marketing (by possessing analytics on spending habits and trends, focus can be on precise purchasing habits) and data warehouse management (all business data can be stored). This solution is focused on the EXISTING relationship between the customer and the business. The scope of this application is to consolidate fragmented data and refine it into very meaningful and profitable Customer Reach Mechanisms.

Benefits for Businesses and their Customers

Who uses it and what do they accomplish? Business o o o o Agrees to honor coupons/rebates Provides a small share/return of every impression/coupon generated via DealMelt Manages a dashboard allowing for coupon/rebate management Manages a dashboard displaying analytics of customers, their purchasing history, and determines thresholds for rewards/coupon dissemination. Integration of Deal Melt custom-QR Codes within the existing POS, which allow for maximum intelligence around item level details.

Customers o o Visit businesses, socialize about businesses and their offerings Redeem Rebates/Coupons provided by the system

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

o o

Attract friends and peers to the same businesses, with an immediate incentive to visit Via OCR (optical character recognition) technology, scan receipts of purchases and populate the system with data. VIA QR (Quick Response) codes embedded in receipts, Customers can scan receipts and their account will store detailed purchasing history around specific items. This removes the market issue of only subtotals being tracked and not individual items.

What business goals are they serving? Business o o o Rewarding its customers that are serving as their informal Sales Agents. Creating a high tech, highly connected, social element to their business Generating repeat business, and new business, for a fraction of traditional marketing and customer acquisition and retention costs By recording detailed analytics around specific, customer behavior at the product/item level, Businesses can reward and incentivize those customers around their regular behavior and introduce precise offers (cross-selling).

Customers o o o Customers can earn rebates/coupons by simply socializing for their favorite businesses. Socializing takes less than a few seconds. Rewards are instantaneous, and recurrent. Customers support LOCAL businesses and provide awareness about businesses which might otherwise not reach various market segments. Customers are MOTIVATED because of rebates, and are a CAPTIVE audience because their friends/peers are more likely to frequent the same businesses. Customers, by scanning receipts and creating data sets around their behaviors and purchasing trends, enable Businesses to reward them via custom rebates/coupons.

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

How will (classes) use each component of the solution? Businesses o Will adhere to Vendor terms and conditions, wherein their basic commitment is to honor any and all coupons presented to them. Utilize a dashboard allowing for more granular management of rebates/coupons that will be triggered and sent to customers that earn these incentives

Customers o Will utilize the application to be rewarded for marketing businesses on their social networks most valuable real estate their wall/status. Will use coupons at their favorite businesses. Will circulate coupon usage by mentioning that they saved X at Y on their wall/status Will scan receipts and create historical analytics around purchasing behavior and trends Will scan QR codes which enable detailed metrics (all of this data previously exacts but is fragmented and copious for the business to manage, mine, and monetize).

o o o o

How will you monitor ROI/progress/success of solution? Businesses can assess via coupon usage, how many current customers are retained, and how many potential customers, are acquired Businesses can consider their cost of customer acquisition to be the coupon, and fee per impression. They can compare this cost to the coupons utilized, and more granularly, the average ticket generated as a consequence of the coupon being a trigger point. Businesses, via their dashboard, can view the amount of impressions and conversions powered by the application.

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Businesses can eliminate wastage and redundancy by focusing precisely on specific behaviors for precise customers. Businesses can accelerate loyalty, and also capitalize on trends within customers; e.g., if their metrics indicate that 45% of their market share is gained on Fridays, they can increase their onsite resources. If their metrics indicate that 80% of their sandwiches on Saturdays involve Turkey, they can have abundant inventory of Turkey and not waste Tuna, etc.

Business analysis company / goals / monetization / challenges

(Size/staffing/locations/market cap) DealMelt.com is a Start-up based in Irvine, CA. It is comprised of 4 Software consultants with backgrounds in web and mobile development.

(Business goals) Our primary business goal is to develop an application that allows for Businesses to directly leverage their loyal customer base as their Sales Army, and incentivize the process for all players involved. We intend to exploit the massive reach of social networks and communication portals such as Facebook and Twitter, which are the tools that make this possible, because: FACEBOOK: TWITTER: 150 million users on Twitter 500 million users on Facebook, 150 million users in the US 50% of active users log on every day Average user has 130 friends Mobile users are twice as active as non-mobile users.

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180 million unique visits a month 75% of traffic to Twitter is from 3rd party applications 37% use their mobile device to tweet

Competition FourSquare.com GoWalla.com SCVNGR Shopscotch

(Business challenges) 1) OCR/QR Technology 2) Procurement of viable businesses with requisite infrastructure (POS, Web Connectivity) 3) Monetization Strategy (fee based, coupon based, outreach targeting based) 4) Time to market 5) Marketing DealMelt itself so as to be a desirable portal for both businesses and customers alike 6) Competition/Brand Awareness

(Monetization) The opportunities for monetization in the Geo-Location/Coupon Interface-Service/Loyalty Accelerator industry are vast: Subscription fees for the business

Utility fees for the customer 8

DealMelt Business Vision Version: 4.0 Date: March 10, 2011

Cost per coupon generated via the DealMelt Interface Ads served on the DealMelt Interface Increased cost per TARGETED coupon serviced, using detailed loyalty metrics from the DealMelt interface Purchase of customer data sets from vertically aligned businesses

In Support of QRs and OCR Technology (borrowed from Browser Media):

The infographic suggests that QR scanning is most definitely on the rise, with a 1200 percent increase in scanning from July to December in 2010. Rather surprisingly, the information reveals that 57 percent of Facebook and Twitter users are reported to have scanned a QR code at least once in the past year. 40 percent claim to have done so 5 or more times. We predict this number would be considerably lower if you asked people outside of Facebook and Twitter out of the digital realm so to speak. The recent boost in QR code scanning is undoubtedly a result of big brands using them to assist with marketing efforts tied with the increase in smartphone usage.