Despite all of the vitriol that’s been written about daily deal websites, and how they are now all universally “out” as a way of promoting your local business, we’d beg to differ. 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 grounds for dropping the daily deal model… In fact, when studied closely, a large number of failures had numerous things in common: failure to grasp 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 little wonder they failed.
But why all the hate mail?
The well-publicized financial and structural changes Groupon and LivingSocial are going through are often cited causes of dislike. The press is quick to point out the unfavorable aspects of some daily deal sites. They typically point out things like spam complaints, a crowded marketplace of daily deals to choose from, “deal hoppers”, customers who hop from deal to deal and seldom become a regular customer.
3 Simple principles for making Daily Deals work for your business
- Understand the financials! – You must clearly understand the numbers as far as your deal is concerned. Know your average sales volume and don’t extend past it with a daily deal. Negotiate credit card processing fees: most major daily deal sites will pay these!
- Have a plan for following up – Up to 75 percent of these 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 quickly – Begin somewhat conservatively, so you’re able to master how the daily deal model works in your business, and then scale up once the time is right.
Daily deal sites aren’t dead, you just need to understand how to best use them for your small business.
About Alan Weeks
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