In a previous blog post about local online advertising, we talked about the role of daily deal websites like Groupon and LivingSocial.com. For those not familiar with the concept, daily deal websites allow businesses to promote special offers that become active when a minimum number of customers sign up for the deal. It allows you to promote a fantastic discount that you only have to deliver on it if it reaches the critical mass required to make sense for your bottom line.
Our conclusion about daily deal websites at the time was that they are certainly worth a try, as long as this is done with a “test and learn” approach.
Fast forward one year later and that’s exactly what many small businesses have done. A great blog post on entrepreneur.com provides highlights of a study into small business use of daily deal websites. The study comes to the conclusion that daily deal websites can be profitable for small businesses, provided they stick with it and run more than just a few campaigns.
The idea is that there is a learning curve to using daily deal websites and when businesses run seven or more campaigns the success rate rises significantly. Alongside this finding, the study offers several tips for success. The first is to check the success rate of daily deals for your specific industry, since some do better than others. They also recommend taking advantage of the fact that there are so many daily deal websites around, so use this to your advantage to negotiate the best terms for your deal.
The other lesson from the study was that daily deal websites tend to be better at lead generation than at providing a short term boost to sales. Again, this speaks to the need to stay in it for the long haul. If the tactic is used with short-term expectations or the testing is done with only one or two campaigns, you might miss out on the longer term benefits of daily deals.
These are lessons that go beyond daily deals and into marketing in general. What do we want to get from a tactic? What does success look like? How will we measure it, and on what timescale? All good questions to ponder as we get into any new initiative!
A mobile website is another great way to reach local customers online. It puts your business in front of mobile customers who are nearby and ready to buy. Find out how easy it is to create your own mobile website.
What about you? What are your experiences with daily deal websites? Let us know, we’d love to hear from you!