Karim Kaderali a Veteran in Giving Santa Barbara Consumers Axxess to Discounts
Amid the rise of Groupon and similar deal-of-the-day companies, the owner of Santa Barbara Axxess has been delivering such a program for more than 12 years
Perseverance has paid off for Karim Kaderali, the owner of Santa Barbara Axxess. “My dad always said I’d end up a salesman of sort,” he says. (Jenn Kennedy photo / www.kennedypix.com)
By Jenn Kennedy, Noozhawk Contributing Writer | @jennkennedy | Published on 08.05.2011
Almost everyone likes a deal. While many American retailers aren’t likely to negotiate on their prices, companies offering discounts through group purchases have made bargain hunting almost mainstream. Karim Kaderali, the owner ofSanta Barbara Axxess, has been offering such a program to locals for more than 12 years.
Originally from Marin County, Kaderali said he showed signs of entrepreneurial leanings early on. Starting with lemonade stands and paper routes, he worked various jobs to earn spending money throughout childhood.
“My dad always said I’d end up a salesman of sort,” Kaderali said.
While pursuing a bachelor’s degree in physical anthropology from UCSB, Kaderali earned money as a church groundskeeper and telemarketer. Upon graduation, he served as a bartender, which gave him the opportunity to remain in Santa Barbara.
Ever the entrepreneur, Kaderali and a friend came up with a business modeled after the Marin Express, a membership-based card that offered discounts to retailers and restaurants in his Northern California hometown.
Short on experience but long on ambition, the two assembled a board of advisers, wrote a basic business plan and secured $30,000 in seed money from their parents to found Santa Barbara Axxess in 1999. While businesses began to sign onto the concept, the duo soon realized they needed more money to print the physical book that members receive. They turned to Women’s Economic Venturesfor a $20,000 loan through its small-business fund. WEV also helped them write a more detailed business plan and provided mentorship for the organization.
The first five years were slow-going for the business, so Kaderali bought out his partner and continued on alone. In year eight, he hit a tipping point and began to see steady growth. The company recently expanded into a larger office space in Santa Barbara’s Funk Zone to accommodate its growing organization and staff of eight.
Today, the company boasts 45,000 members and 350 local participating businesses. From dentists and car washers to electricians and movie theaters, a variety of businesses participate in the program. Members pay $30 for the card, which gives them an average of 50 percent off on their first service and 10 percent off ongoing services with local businesses annually.
A key difference between Santa Barbara Axxess and its competitors is its fundraising program. Countywide, it works with 90 schools and nonprofit organizations, which sell the books to their networks, thus benefiting each side. By donating $10 of every $30 book sold through its fundraising partners, Santa Barbara Axxess recently crossed the $500,000 mark in money raised for local schools.
Kaderali and his team were also the first to offer a Daily Deal program to members for various products and services. The structure gives local businesses a way to drive traffic quickly and see immediate cash, according to Kaderali, who says he typically pays the businesses the day after their specials run.
“Unlike Groupon, we work with businesses to structure deals that help meet their goals and build long-term customers,” he said.
He said businesses that participate with other sellers are often flooded with customers who have paid a fraction of their normal rate, and end up overwhelmed and unable to provide quality service. To avoid this pitfall, Kaderali structures a feasible offer and limits the number of available coupons so the business owner can absorb and grow through the promotion.
As for lessons learned through his 12 years in business, Kaderali said, “You never know where things will lead, and often clients who declined to participate repeatedly came around after seeing the business flourish.” He added that being in a small town means a company’s character and reputation are crucial for it to have success year after year.
Axxess Ventures, the parent company of Santa Barbara Axxess, is now offering franchise opportunities, and it recently introduced an iPhone application for easy searching on the go. Click here for more information.