Are Daily Deal Sites Right for Your Business?

Could a daily deal site like Groupon or LivingSocial help you reach your business goals? They can be a valuable addition to your marketing strategy, but an immediate return on investment is rare. What daily deals are great for is attracting new customers.

Here are a few statistics from SCORE, a nonprofit dedicated to helping small businesses succeed, that are particularly relevant:

    • Nearly 80 percent of daily deal customers are first-time customers.
    • About 68 percent of daily deal customers are between 18 and 34 years old.
    • Revenues for daily deal sites like Groupon and LivingSocial are expected to reach $3.93 billion by the end of 2015.

After we provide a brief history of daily deal sites and explain how they work, let’s go over some of the benefits and drawbacks of using them. By the time we’re done, you’ll know what’s best for your business and will be able to take an informed approach to using daily deal sites.

A Brief History

Daily deal sites, also referred to as deal-a-day or flash sale sites, first began springing up in the mid-2000s and quickly gained popularity. By 2008, both Groupon and LivingSocial had entered the market and taken the business of online deals mainstream. The spread of social media allowed the daily deal sites to thrive, but the sustainability of the industry as a whole is often scrutinized due to the never-ending debate on how to calculate a business’ return on investment.

If you’re more of a visual learner, MightyDeals, a site for creative professionals, put together a tremendous infographic on the history of daily deal sites.

How it Works 

The daily deal model works by allowing businesses to offer limited-time discounts on products and services to an audience that is much larger than their existing customer base. In exchange, the daily deal sites charge fees or take a percentage, often a large percentage, of the profits.

Pros

1. Brand Awareness

You’re presenting your business to a whole new audience!

2. New Users

We mentioned earlier that about 80 percent of daily deal customers are new customers. This can be a tremendous way to build your customer base.

3. Analytics

As Tamara Gruzbarg, Senior Director of Analytics and Research at Gilt Groupe, a designer fashion flash sale site, says:

“One of our value propositions is that we can provide a lot of information and insight about the people who are shopping their brands. What else are these customers interested in? Do these tend to be our more loyal customers, or less loyal? What other brands are they interested in?”

If you ask for them, some deal sites will provide you with detailed analytics about your new customers, including age, where they’re located and what other brands they like. Internally, you should also using tools like Google Analytics (which we’ll cover in a future newsletter) to measure where your new users are coming from and how many of them are returning.

Cons

1. Profits Can Be Disappointing

If you use a daily deal site expecting it to dramatically affect your bottom line, you might be setting yourself up for disappointment. Daily deals are a form of marketing. A successful daily deal campaign results in new customers and increased brand awareness, not necessarily an immediate boost in sales.

2. A “Deal” Business Reputation Can Be Damaging

If you offer daily deals too frequently, you run the risk of branding yourself as a “deal” business, which is often synonymous with cheap. Having deals running at all times is not recommended for most businesses.

Helpful Tips

1. Make Sure Your Staff is Prepared

Sometimes businesses offer a deal without anticipating and properly preparing for the influx of customers. This can result in poor customer service. Remember that you’re using these deals to get new customers. To retain them, you’ll have to ensure the same experience your loyal customers have come to expect. This is where using an online scheduling platform like Acuity Scheduling can save time and money, taking a lot of pressure off of your employees and allowing them to instead focus on delivering the product or service you’re offering.

2. Be Strategic About When You Offer a Deal

Is your business seasonal? Do you tend to get more business during the summer months? Then offer a deal in the winter! Use the daily deal sites to pick up new customers at times when business is usually slowing down.

Setting up a Deal on Groupon

Groupon makes it simple to set up a deal in just a few minutes. Log on to the Groupon homepage and scroll to the bottom. You’ll see an option to “Run a Groupon Deal.”

Most businesses are interested in setting up a local deal. After you click on “Local Deals,” you’ll be prompted to fill out your business information. Complete that and you’ll be taken to the Deal Builder section where Groupon will help you design your deal.

Step 1: Choose Service & Price

    • Once you decide what service you’d like to offer, choose the discount to accompany it.

Step 2: Set Your Fine Print

    • It’s common to set a limit of one discount per person. In this step, you hammer out those types of details.

Step 3: Confirm Location

    • Just make sure the address in the box is correct. If not, you’ll have to go back to the step where you entered your business information.

Step 4: Sign Agreement

    • Are you happy with how the deal looks? Time to sign the agreement and post it then.

The Contract

    • It’s pretty straight forward, but keep in mind that Groupon takes a certain amount of each sale. This is referred to as the Remittance Amount. They usually take about a 50% cut.

Setting up a Deal on LivingSocial

LivingSocial allows members to find great deals in their area. Unlike Groupon, which allows any business to offer a deal, LivingSocial takes applications on this page and decides which deals are most relevant to its users. One thing that makes LivingSocial unique is that it incentivizes its users to share deals. If a user signs up for a deal and gets three friends to sign up, it’s free for them.

Setting up a Deal on Amazon Local

There are a few things that make Amazon Local different from Groupon and LivingSocial. First are the more than 215 million active Amazon users. A long history with its customers allows Amazon to more accurately recommend deals to potential customers based on their past behavior. Second is the affiliation companies can have with Amazon by offering deals on Amazon Local. Amazon customers are extremely loyal, and to have your business featured is a sort of unofficial endorsement. When you sign up, Amazon Local representatives will help you write content to increase the chances of users being interested in the deal you’re offering.

Similar to LivingSocial, interested businesses must send a form requesting to be considered for Amazon Local. It’s not uncommon to see deals from LivingSocial and some other daily deal sites on Amazon Local, so if you use another site, still check.

Like the other daily deal sites, Amazon Local doesn’t have any upfront costs, but does take a percentage of the sales.

Other Daily Deal Sites

    • Gilt – Provides instant insider access to top designer labels, at up to 60% off retail.
    • Woot – Each product is on sale for one day only, with limited stock.
    • 1Sale – Includes several different product categories and puts each deal up for 24 hours.
    • Google Offers – Although it’s still in beta, Google Offers has some great local deals.
    • TravelZoo – Offers deals to upscale locations to over 26 million subscribers worldwide.
    • Zozi – Deals on outdoor gear and activities.

Setting Up Daily Deals on Acuity Scheduling

Now you know how to set up a daily deal and some of the best options, but if you want to get the most out of it, you’ll want to connect the deal to your Acuity Scheduling account. It’s a simple process and will help simplify your life when the phones are ringing off the hook!

Most of the daily deal sites will work the same way, so we’ll use Groupon, the most popular, as an example. On page 6 of the Merchant Center User Guider, Groupon shows you how to easily download a spreadsheet or PDF version of the vouchers from your Merchant account so you can manually track and verify them. We recommend downloading a CSV (spreadsheet) version.

Once you have that list, log on to your Acuity Scheduling account and go to Promotions within the Appointments section. Choose “Add New Coupon” and enter the information (name of promotion, discount you’d like to offer, etc.). Then enter the Groupon codes from the list you downloaded into the “coupon codes” box and make them one-time offers. In just a few simple steps, you’ve set up a daily deal and integrated it into your calendar.

If you’d like a more detailed description, it’s available on the Acuity Scheduling help page.

About the Author

Acuity Scheduling (@AcuitySchedulin) is an online scheduling platform that saves thousands of small businesses time by allowing their clients to book appointments online, on their own time, at any time, from anywhere in the world. For more information about services and pricing, visit AcuityScheduling.com.

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