Making Daily Deal Sites Work For You
One of the latest trends is discount Daily Deals and although they have had a bad press and have many downsides, they can work for you if you plan your strategy very carefully. If you bear in mind that your deal should be seen as a loss leader, then you can benefit by getting traffic to your website and customers through the door of your business. However, you have to have a very clear strategy for turning your deal customers into future profitable customers, otherwise your deal will just be a waste of time. Rice University’s study on Daily Deals found that only 20 percent of deal customers return to make a full price purchase, so bear this in mind before you clog up your business with low profit margin sales.
Know your deal customer
Before you do a deal, you need to realize that the majority of Daily Deals customers are just out looking for a bargain and are probably pretty savvy when it comes to getting the best bargains and avoiding having to pay full price for anything else you might have to offer. Do some legwork on finding out who your potential deal customers are and what they might be expecting from the deal. Question the Daily Deal site salespeople and get as much information about their subscribers as you possibly can before you agree to a deal.
Converting deal customers to full paying customers
One of the gripes about Daily Deals is that so few deal customers ever come back to buy something at full price -- they simply wait for the next deal, whether it is from you or your competitors. Armed with this information, you should work out a robust plan to get your deal customers hooked into your business. You need to capture their contact details, get their permission to contact you in the future and find out exactly what they need in terms of products or services.
Consider offering part of your deal through a Daily Deal site, then getting customers to upgrade to something more profitable. For example, if you run a hotel, you could offer any deal on your cheapest rooms and get them to upgrade when they call to book their stay, or upsell on meals or some other service that your hotel offers, such as a health club. The trick is to create a marketing funnel whereby you attract customers into the final with the Daily Deal then have compelling up sells and cross sells that they will find hard to resist. Make sure you are in control of the process -- preparation and planning is the key.
If your deal goes well on the day, you could be inundated with new business, and if you have carefully planned how to upsell and cross sell irresistible products and services, then you should make a decent profit. However, you must consider whether you are prepared to cope with a high volume of business. Many businesses have been caught out with this -- for instance, restaurants can get booked solid for months with extremely low profit margin diners, with no capacity to take full paying customers. One way around this is to either limit to your deal to a specific number, or only allow so many deal customers per day -- in other words, keep control and leave plenty of spare capacity for your normal clientele.
Shop around for the best deal
Don't assume that one Daily Deal site is any better than another as there are hundreds of deal sites around now and some might suit you better than others -- you don't need to stick with the big players such as Groupon and Living Social. It pays to shop around.
Have a look at Daily Deal Media, which is dedicated to social commerce and tracks around 600 Daily Deal sites. You can search on their database for Deal sites that suit your business and your products and services.