Your Business and Daily Deal Sites – Is It Worth It?

While daily deal sites promise more traffic and more sales, they don’t warn you of the drawbacks of “quick fixes.” While a bump in revenue may seem great, there are limits to the effectiveness of sites like Groupon, Google Offers, and Living Social.

You should do your research beforehand. What is your business’s demographic? A target audience will vary from brand to brand, but one thing will remain the same – a business wants (and needs) customers that will continue to use its products or services more than once.

Let’s cut right to it – much of the traffic your site will see from a daily deal promotion will not come from customers who will make repeat purchases and remain loyal. Daily deal transactions are more likely to come from people looking for a quick discount on an item or service they are interested in, regardless of who is offering it. After that need is fulfilled, the chances of them making a repeat purchase with you drop significantly. According to a 2021 Rice University study[1], which surveyed 641 businesses, daily deals converted only one-third (that’s 33 percent) of new customers to repeat purchasers.

A daily deal site can easily bring in new customers, but the hard part is getting those new customers to return and to bring their friends with them. That is unless you take proactive action to transform these customers into lifetime users.

Below are some best practices to make the most of daily deal sites:

Target the Right Customers.

Research daily deal sites and partner with the one most widely used by the audience you are trying to reach. Ask around first – both online and off. Read reviews (take these reviews with a grain of salt, often they are from angry business owners venting their frustrations), and talk to friends in your industry to gain a better perspective. As of August 2022, the Better Business Bureau had received over 1,000 complaints in just the past year against daily deal sites[2]. It’s up to you to pick a site best aligned with your goals.

Choose an Offer.

Keep in mind daily deal sites will take a commission (sometimes up to 50 percent) on each sale, so while your first instinct may be a bargain-basement price, this is not always the best strategy. What can you realistically offer, factoring in commissions and miscellaneous expenses? You’re trying to make a profit, not take a loss. With the right competitive offer, you’ll see positive results.

Prepare.

If your business offers a tangible product, make sure you have enough in stock. Consider a strategy for filling orders and mailing out packages. If your business is more service-based, and you don’t keep more than one customer support rep. on the payroll to answer emails and take help calls, consider recruiting friends and family to provide extra (free) help.

Collect Contact Information and Follow-up.

When customers place their orders, thank them with a follow-up email and coupon for future purchases (this coupon can be as small as 10% off or free shipping). Invite them to follow you on Twitter and Facebook. If what you’re selling involves installation or set-up, a follow-up call to offer support and answer questions brands your business as one that cares about its customers.

Introduce a Loyalty Program.

Incentivize repeat purchases with a loyalty program. Reward points, exclusive discounts, and freebies with purchase are all great ways to motivate customers to continue using your services. If your product is more of a one-off thing, consider a referral program. If a customer recommends a friend who makes a purchase, send the customer a $10 gift card (for example) as a way to show your appreciation.

Ultimately, going with a daily deal site is a risk, but one that can be highly rewarding if you plan it right. Using a daily deal site is just like any new business partnership, and due diligence is extremely important. With the right strategy and the right research, you’ll see growth and sustained success.

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