One of the most popular forms of Internet marketing that has sprung up over the past few years has got to be daily deals. You know the drill – a company would make one of their products available at a significantly to ridiculously reduced price, but for one day and that day only.
The hope would be that such a big discount would be worthy of some word of mouth advertising, and that people would rush to the store in droves in order to get their hands on the item. What’s better for the business owner is that even if they sold out of the product, many people would still come into the store and some would buy something else entirely while they were there – not to mention the customers that were successful in their pursuit of the sale product in question but then bought another item since they saved so much on the initial one.
But as is the case with nearly everything, things have a tendency to get old rather quickly – while still wildly effective for most merchants that pursued them, some business owners have been wondering of late if they still have that fresh, new deal smell for consumers.
Should small business owners still try and make daily deals one of their big selling points and incorporate them into both their short and long-term marketing plans? Or is there something new that is equally as effective that they should start going after?
Should you launch a daily deal?
First of all, to answer the question if daily deals are “worth it” to you as a small business owner. That answer, as you might imagine, is multifaceted and entirely depends on your situation. If you’re just starting out and are facing competition and/or significant obstacles just to bring people through your doors, then daily deals are absolutely still worth your time. It has been shown that daily deals are one of, if not the, most effective way to bring in new customers.
A recent study by email marketing giant Constant Contact showed that out of 1,305 small business owners and marketing experts polled, 53% of them found that daily deals are the best way to attract new people into your business. And the meteoric rise of Groupon and the clones that followed it would show that those 53% folks are 100% right. The lure of an insanely great deal, plus the motivating factor of having to act soon to earn it, are too much for many people to pass on. This is especially helpful for neophyte businesses just trying to get their wares and their brand in front of new eyeballs.
But It’s Also Costly
So if daily deals are so effective, why isn’t everyone still doing them? Why wouldn’t all small business owners run a variety of daily deals on a semi-regular basis to bring in droves of customers? Well for starters, they aren’t cheap to run.
One of the points of doing a daily deal is to get people excited about it and to virally market it for you. In order for potential customers to do that, the deal has to be worthy of excitement. A 5% off all dishwashing gloves is great, but that will hardly get anyone excited. Offer 50% off on all televisions for a one-day only period, however, and you might have a stampede on your hands.
But how much money will 50% off cost you? As a business owner, you have to be diligent and thoroughly crunch the numbers on any deal you run to make sure it makes good fiduciary sense. Whether your deal is on a service or a good, you must innately know the margins to determine how low you can make the deal, how many you are willing to offer at the reduced price point, and how much it will affect your bottom line.
But remember – even if you are making a grand total of zero dollars and zero cents on each unit sold at such a drastically reduced price, you ARE getting a (hopefully) high amount of new customers.
Steps For Successful Daily Deals
Let’s say that you’ve really done your homework and found out that you and your small business are actually a great fit for a daily deal. You’ve ran the numbers twice, maybe even thrice, and discovered that while your profits will obviously shrink a bit, you can absolutely afford to offer one of your items at a heavily reduced price for a day (or up to a certain maximum sold, first-come first-served).
Here are a few steps to ensure that not only your daily deal goes off successfully, but that you’re doing everything you can to turn those first-time customers that are just here hunting for a deal into repeat buyers, which is the ultimate long-term goal for all businesses and daily deals.
1. Incentivize People to Tell Friends
If the deal is just plain out of this world (e.g. – 100% off a new car), odds are you won’t have any issues getting people in your doors for your daily deal. But why not offer up smaller incentives for those customers who can tell their friends about it? This will not only help advertise your deal and your business in general, but by offering a secondary reward to those who actively participate, it will allow you to make a less dramatic initial deal while still ensuring a high turnout. If you are planning on offering a deluxe coffee maker at 50% off, you could also offer a pound or two of free premium coffee to those who share the news of the deal with their friends.
The easiest and arguably most effective way to do this would be via social media (ask people to tag your business in a post or Tweet mentioning the details of the daily deal and keep track, have them check in while they’re there via FourSquare, etc.), but the methodology is up to you, your business, and what you’re comfortable with. Just make sure that it’s easy for the customers to share and it’s easy for you to keep track.
2. Get Your Employees in On It
If you’ve done it right, you could be seeing a MUCH higher than normal amount of customers on the day of your deal – it could very well be a madhouse. Make sure that you adequately prepare your employees for this. You’ll not only need to educate them on the ins-and-outs of the daily deal itself and any corresponding rules or qualifications that must be met, but also prepare them for a long, hectic, and stressful day.
Think about doing something to reward your staff for going the extra mile and getting through the day without losing their positive attitude – like a paid day off redeemable at a later date. As with all aspects of your business, impeccable customer service is crucial to getting people to come back through your doors. It’s perhaps even more critical during a daily deal, as many of the people coming into your business will be there for the very first time. You can’t make a first impression twice, so make sure that it’s a good one.
3. Make the Deal Too Good to Pass Up
We mentioned this briefly earlier but it bears repeating – the deal MUST be something truly great or it’s not worth doing. If you’re the type of business owner that cringes at the thought of all that lost profit, even for a day, that’s fine – this marketing strategy just isn’t for you. You have to approach the deal knowing that you could possibly lose money, but gain new repeat customers, which are worth the cost.
Making a great deal will also help to get people to spread the news on their own accord, which will make your job easier since your ultimate goal is getting people to come in and check it out. But again, MAKE SURE that you don’t go too crazy on the deal, or at the very least safeguard against possible nightmare scenarios that can ruin your profits.
You won’t have to search long to find small business daily deal horror stories, where they jumped in to be included in a Groupon deal only to have failed to set a maximum number of redemptions and lose thousands of dollars from savvy deal hunters redeeming the deal in droves.
4. Customer Engagement
If the deal is tremendous, everyone knows about it, and the people that do come in are treated with excellent customer service, you’re well on your way to seeing at least a good portion of the daily deal hunters come through your doors again. The cherry on the top of this customer sundae will be engagement.
Getting in touch with the customer after the fact, be it a couple days later or even a month later, is crucial. The best way to do this is to somehow make sure you obtain the email address of each and every customer who took advantage of the daily deal. Doing a daily deal online makes this easy as pie, but for in-person deals (e.g. – a restaurant offering a new menu item for only $1 for one day only) is a bit trickier.
Regardless of your collection method, once you have these addresses, these are like gold. Consider polling them with a survey to see how they enjoyed their daily deal and what they thought of your business – if survey turnout is low, consider offering up a small incentive to participate. Or stipulate that all the new customers who came in for the daily deal will be added to your mailing list – you can let them know that email subscribers will be the first to know of future daily deals, and may be privy to other sales that non-subscribed people aren’t eligible for.
Short and long-term engagement is crucial to getting them to come back, so make sure you are getting those addresses!