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'Groupon for Moms' Takes Page From Mary Kay

Powered by Female Sales Force, Plum District Raises $8.5 Million in Second-Round Funding From Kleiner Perkins

By Published on .

SAN FRANCISCO (AdAge.com) -- Mom-based social daily-deals site Plum District is a Groupon clone with twist. It has the same daily deals that coupon sites are known for, but like Avon or Mary Kay, Plum District is counting on a female sales force to power its coupon engine.

Moms who use Plum District can be reps and earn a commission on every sale.
Moms who use Plum District can be reps and earn a commission on every sale.
While many other coupon sites use call centers to find and negotiate deals, Plum District mobilizes the built-in army of mom customers and their PTA and soccer-team networking by turning them into partners. The moms who use the site can also be reps and earn a commission on every sale.

Plum District CEO Megan Gardner said she's happy to be compared to Mary Kay because it's a bit of a throwback to what has worked before. "We're taking on a new business trend with older-school sales tactics," Ms. Gardner said.

Plum District today is expected to announce an $8.5 million second round of venture funding. "We're seeing the incredible power of the mom population," said Aileen Lee, a new Plum District board member and partner at Kleiner Perkins Caufield & Byers, which led the funding round along with General Catalyst Partners. "This is a community with distinct needs and we're combining that with a small army of moms around the country who know the businesses around their area and their community," Ms. Lee said.

Launched in May, Plum District's business has grown from just a couple of cities to around 20 "districts" -- what the company calls their sales areas, which now include San Francisco, New York, Minneapolis, Los Angeles, Washington and Denver.

Under Plum District's business model, a mom picks a vendor and asks it to participate in the daily deal. For her work, she earns part of the deal, multiplied by the number of people who use it. While Plum District won't disclose actual figures, some moms have made what Ms. Lee describes as a "full-time salary" working for the company and themselves.

Ms. Lee said that when KPCB was doing the due diligence research before the investment, she spoke to moms around the country who were interested in finding a way to supplement their income as well as get great deals. "They were looking for a way to make money, have flexibility and leverage the skills of what they know how to do," she said. "These are the moms that are already involved in their communities."

When it comes to comparing her company to all the others, Plum District is used to the "Groupon clone" question. "We're asked that a lot by vendors," Ms. Gardner said. "We know we're doing something different because of the narrow focus of the audience -- no one us is focusing on the moms -- and the other thing is the moms sales force. We are not a one-hit wonder media buy."

According to the Marketing to Moms Coalition Survey done in 2010, there are more than 50 million moms in the U.S. who are in charge of 85% of the household-spending budget, and they spend $2.1 trillion a year. Venture capitalists see moms' potential and it's growing quickly -- Along with July's first-round funding of $2.1 million, Plum District has gathered more $10.6 million in less than a year of existence.

Jillian Griffin (right) of Newport Beach is a mom of four and Plum's top salesperson nationwide.
Jillian Griffin (right) of Newport Beach is a mom of four and Plum's top salesperson nationwide.
The upside to using moms is they tend to know the lay of the land in their local areas and can reach out to businesses tailor-made for the mom community -- groceries, family outings, children's classes, camps and babysitting services.

Just like with Mary Kay, some women are born for sales, and at least one mom in Southern California has been earning a six-figure income through her sales at Plum District. Jillian Griffin of Newport Beach is a mom of four and Plum's top salesperson nationwide. "It's been a thrilling experience," Ms. Griffin said. "We've impacted our community and found new strategies and are able to impact the local business."

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