Without a doubt, 2011 was the year of the daily deal. Businesses jumped on the opportunity to offer great deals on the web and reach a large audience of potential customers. Sites like Groupon and Living Social made major breakthroughs in online promotions, and were able to sell huge amounts of cut-rate coupons and provide cash payouts to businesses immediately. The concept was revolutionary.
But as we moved into 2012, daily deal sites have seen a decline in numbers as businesses are more skeptical of the efficacy of this new platform. If done right, a daily deal can be a fantastic marketing tool and a fast and powerful way to reach new customers. Without proper consideration, however, you can easily become one of the businesses that has ‘done a Groupon,’ but ultimately ended up losing money and gaining little, if any, repeat business. So if you want to offer a daily deal, you must do it right.
Here are a few things I’ve learned about making a daily deal work for YOU:
Plan Out a Special Promotion
One of the best aspects of daily deals is their ability to drive customers to your business — immediately. With this in mind, you can time deal offerings to your advantage. Use daily deals to kick off an upcoming season, or conversely, stimulate an otherwise slow time of year. Be specific and strategic in what exactly you offer. Plan deals around the launch of a new product or service. Try to avoid giving too much of a discount or percentage, so your new customers will be inclined to spend a little more and not just redeem and go.
Time it Right
Take care to consider the timing (and expiration date) of your deal. Expect an initial rush of clientele in the first few weeks after the promotion, and then again about three to four weeks before the expiration date. Don’t start or end a deal during a busy time of year, and don’t let the deal drag on forever — I would suggest only four to six months as a redemption period. This is a subset demographic and should be considered as such.
Get Contact Information
Daily deal sites are a great way to target different (and more regional audiences) than you may normally reach in your marketing. Make the most of this new opportunity by getting contact information for every customer who buys your deal. By that, I mean get email addresses. Email marketing is the most cost-effective channel for reaching new customers and ultimately gives you another avenue to generate return business from the bargain hunters.
Daily deals will get new customers in the door — what you do after that is up to you. Although deal clients are notoriously thrifty, make sure that you have a strategy or procedure to up-sell or promote a better product or service than what they may have purchased. Create a special pitch designed just for deal customers. This will allow you to showcase other offerings, and also increase your margins on deals that are typically very slim.
Offer a Follow-Up Deal
Daily deals have a way of pulling new clientele out of the woodwork to take advantage of a steep discount. This demographic is driven by savings and you can use that to your advantage. Consider offering a follow-up to your daily deal customers that will bring them back to your business a second time. This could be a second coupon that is not necessarily as generous, or you could build a frequent customer or referral program to incentivize return business. Either way, your new clients have already responded to your deal and will likely be receptive to another.
Track Your Results
As new customers swarm your business to redeem their coupons, make sure to keep track of your numbers and redemption rates. Because of the substantial cut taken by daily deal companies (typically 50-60 percent), it is critical to understand how the promotion will affect your bottom line. Keep track of material and overhead costs to ensure you’re not breaking the bank, and keep track of redemptions as many deals will go unused — which actually increases your profit margin on every coupon sold.
Have a High-Quality Product
Ultimately, the ability to attract repeat customers is due to your business providing a high-quality product or service — not how well your coupon campaigns are run. Strive to create a great experience for your customers, regardless of how they found you, and the repeat business will follow. By carefully planning a daily deal, you can reach thousands of new customers with little risk, and take maximum advantage of this amazing digital marketing revolution. Good luck!
Senior executive Anita Brady is the President of 123Print.com. They are a leading resource for high quality customizable items like business cards, letterhead and other materials for small businesses and solo practitioners.