Tuesday, May 1, 2012

A Hidden Downside to Daily Deals?




by Gary Schine


The other day, I was in a restaurant where a customer presented his Groupon to the waiter. Then, a customer at the next table, clearly a regular as he addressed the waiter by name, asked “what's that certificate thing all about”.

That got me wondering: Can daily deal sites cause resentment among regular customers who miss the deal? Could some of these customers be resentful that a flood of new customers are getting what appears to be a huge discount, while they pay full price? Are daily deals rewarding people for not being customers of a business?

Some people don't know about Groupon and very few people now about the full and burgeoning list of Groupon copycats. Some of those people may be regular customers of the store or restaurant that just ran its Groupon promo.

By the time a customer presents a Groupon, the deal is likely passed, and unavailable to the regular customer who accidentally learns about it.

It seems to me that daily deals are in essence, the opposite of loyalty programs. While loyalty programs reward regular customers for their continuing patronage, daily deals reward non regular customers with a fat one time discount. I guess that's not really fair: they actually reward anyone and everyone who is wise to the program, to get a one time discount, previous customer or not. But with a daily deal program, the regular customer in the restaurant who asks what that Groupon thing is all about gets nothing more than an explanation. If that same customer asks about a loyalty program, he'll get his own card for the program with a stamp (or whatever) that puts him on the way to his stated freebie.

Take away for merchants: Evaluate all your promotion options as objectively as you can, before signing on the dotted line.

Tuesday, April 3, 2012

Welcome

Welcome to our blog about small business marketing. We will focus (at least initially) on Deal of the Day offers, such as Groupon, Living Social, Bloomspot, Yellow Pages Deal of the Day, and Google Offers. We've created a calculator that merchants can use to decide if Deal of the Day marketing makes sense for their business and help decide how to structure the deal to maximize profitability. A link to the calculator can be found in the column on the right.