Despite the vitriol that’s been written about daily deal websites, and how they are all universally “out” as a way of marketing your local business, we’d beg to differ. There are a variety of factors that go into making these dailydeal sites work for your business, and a few well-publicized failures, shouldn’t be cause for sinking the daily deal model. Actually, when looked at closely, a large number of failures had a number of 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 wonder they failed.
So why all the hate?
One reason may be the financial struggles Groupon and LivingSocial are going through. Although they probably will come out fine at the end of the day, financial writers wanting to seize upon the negative aspects of some daily deal sites. They regularly point to things such as spam complaints, a glut of deals from which to choose, deal hoppers (customers who hop from deal to deal with no intention of being 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 understand 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!
- Have a strategy for following up – Up to 75 percent of those daily deal customers are new to you, so be sure that you have a plan set up to entice them to return, whether that be another coupon, or….?
- Don’t start too fast – Begin somewhat conservatively, so you can learn how the daily deal model works in your business, and then scale up once the time is right.
The death of Daily deal sites is grossly overstated, and you can still use these to grow your small business, by taking the time to do it right!