Despite all the vitriol that’s been written about daily deal websites, and how they are all universally “out” as a means of marketing your local business, we’d disagree. There are a variety of factors that go into making these daily deal sites work for your business, and a few well-publicized failures, shouldn’t be cause for dropping the daily deal model. In fact, when studied closely, a large number of failures had numerous things in common: failure to understand how to run a daily deal promotion, poor negotiation of their deals, and not tracking customer redemption and/or spending. Lacking these vital pieces, it’s no surprise they failed.
So why all of the hate?
One reason may be the financial struggles Groupon and LivingSocial are experiencing. Although they very likely will come out fine at the end of the day, financial writers wanting to seize upon the harmful aspects of some daily deal sites. They frequently point to stuff like spam complaints, a glut of deals to pick from, deal hoppers (customers who hop from deal to deal with no intention of becoming a regular customer) and in fact deal fatigue.
3 Ways you can help make Daily Deals work for your business
- Understand the financials! – Make sure you clearly know the numbers as far as your deal is concerned. Know your average sales volume and don’t exceed it with a daily deal. Negotiate credit card processing fees: most major daily deal sites will pay these!
- Follow up with your new customers! – As many as 60-75 percent of these daily deal customers are trying you out for the first time, so it’s vital that you have a plan to coax them back for a return engagement! Offer another coupon, and other incentives to ensure you see them again!
- Don’t go too big, too fast – Start conservatively, so that you can learn the ropes and not be overloaded by the deals, and leave a sour taste in everyone’s mouth.
Daily deal sites aren’t dead, you simply need to know how to best utilize them for your business.