Daily deal sites like Groupon or Living Social have gained popularity with consumers across the board. These sites introduce consumers to companies and services they previously were unfamiliar with and provide a discount in the process. They also present a terrific opportunity for small businesses to reach a broad audience without much effort on the front end and can help boost visibility to a previously untapped market. However, daily deal site marketing comes with risks so it’s important to get your facts straight before jumping on board. Consider the following benefits, risks, and tips before signing up on one of these platforms.
Posting your business on a daily deal site is a surefire way to increase your exposure. According to Statista.com, Groupon had a total of 49.1 million users in Q3 of 2017. Sure, that’s not all in your particular city, but that’s nothing to scoff at.
Consumers are likely to check out your website or social media channels prior to purchasing their deal. They’ll want to be sure you’re a legitimate company and that they’re truly interested in the service associated with the coupon. Businesses should draw on this opportunity to garner more social media followers and capture new client information to generate new leads.
Daily deal sites get you in front of an audience you may not have reached otherwise. Gaining new customers can become a numbers game so getting in front of as many people as possible is a huge draw to joining.
These sites are not free to join and sometimes they’re not entirely upfront about that. They may charge a percentage of sales of up to 50 percent or more. Be sure to thoroughly read your contract and calculate if you’ll make a decent profit to justify signing up.
Sure, it seems like a good problem to have…too many sales to handle! In reality, not being able to keep up with demand can compromise your service level and give customers the wrong impression. Be sure you’re prepared to field an influx of incoming service requests and set expectations with customers once you accept.
There are a lot of daily deal sites. A few things to consider when choosing the right fit for your business:
• Is it niche-specific?
• Does this focus on the right geographic area?
• Will this reach my target market? (ask the company to provide you their typical customer profile)
• When will I get paid and how does the daily deal site get paid?
• Determine the percentage of sales they’re getting – 50/50? 70/30?
• Are there credit card processing fees and if so, who will pay them?
• How long will the listing run?
As previously mentioned, advertising on one of these sites can create a huge demand. A smart way to offset the influx in business is to create restrictions around the deal. Limit customers coming from the site to specific times, preferably your slow or off days. Also, be sure the initiative won’t end up costing you money or undue stress trying to keep up with the higher customer volume.
Don’t be shy about negotiating your deal with the site. If their fees are too high to stomach, ask if they can give you a better offer if you’re not receiving top billing on the site. They work with companies of all sizes and likely willing to accommodate your financial needs to get you signed up.
Daily deal sites seem fantastic at first glance. Just be sure you’ve crunched the numbers and realistically decided if it’s worth signing up. Ask yourself these questions:
• How much am I willing to pay for a new customer?
• Will this attract the right customer?
• Am I making money instantly or later?
• Will I ultimately lose money?
Companies with high customer lifetime value are prime candidates. Gyms, educational courses, instructors, therapists, massage therapists, personal trainers…anything membership-based or with long-term customer retention models will likely see a promising return.
Last, compare if your service is truly worth promoting at a discounted rate. If you feel you could be getting full price using other advertising mediums, use that plan of attack first and if you’d still like to try your hand at a daily deal site, utilize these tips to ensure you get the most bang for your buck.