Digital Marketing | Digital Strategy | This Digital World

Daily Deals - know what you're getting into

A new marketing category is born - daily deals.  Sites like Groupon, Living Social, Tippr and others have sprung up across the world, offering consumers amazing discounted deals.  In Seattle alone there are more than 6 companies competing for their share of the coupon stampede (Foodie Offers does a good job of aggregating the restaurant only deals which makes my life easier).

So, it's good for consumers because they get access to a wide range of discounted offers. But is it good for the businesses involved?

I went to Flying Fish in Seattle the other night to take advantage of a restaurant deal there.  The place was packed out, we waited half an hour longer than our allotted booking time to get a table and the service was average.  They just couldn't cope with the influx of new business.  What is that going to do to their reputation and will all those people that jumped on the discounted meal really come back.

If your business is approached by a daily deals salesperson, make sure you know your margins so your 'free marketing' doesn't hurt your business or your reputation.

Related links: Groupon and why it matters to your business

Groupon and why it matters to your business

Groupon is a website that presents a local, daily offer to thousands of willing consumers.  The offer is only good for that day and is dependent upon a minimum number of people buying it.  The offers are usually significant - 50% off your dry cleaning, 30% off a meal at your local restaurant etc.
 

 

The local element is extremely important since it creates relevancy.  The fact that the offer is only available that day creates urgency and for the business making the offer, Groupon creates new customers.

Groupon makes its money by taking a slice of the action - but a small enough slice to make this new form of advertising extremely lucrative to small businesses, that otherwise would never be able to afford the kind of exposure Groupon can give them.  In fact more that 95% of businesses that advertised once on the site came back for more.

Here is a simple comparison of how Groupon compares to traditional advertising (click to enlarge):

With over 6.5 million users, Groupon is a very cost effective way to market your business.

Groupon uses very simple ways to get the offer to the user.  I might not be in the mood to check the Groupon website every day for an offer that suits me, but I get an email every day (opt in) that tells me what it is.  If I'm on the go, I can download the Groupon iphone app and sign up that way.

As a local business owner, there really is very little downside in using Groupon as a way to market yourself.  It's free advertising and as long as you do your maths and figure out what discount you can afford to give without going bankrupt, you are sure to benefit from the increased business.

There is a great set of FAQs on the website, explaining the service in more detail and if you are a business owner you can watch a video and submit your business here.