Many people have heard the story of the local Cupcake baker who nearly went bust when their deal on Groupon swamped them. Clearly daily deals can give a real boost to your business but how do you make sure you get the maximum benefit and don’t let the success backfire…. Here are 4 key tips – the anatomy of a great deal….
1. Don’t over commit yourself
- Get some idea of what response you might expect. Ask the deal site for stats on how many users they have and typical numbers/percentage of deals taken up in your sector.
- Think carefully about your capacity to delver on the deal.
- Put a limit on the number of deals available. If you sell out it makes for great publicity and you can normally rerun the deal later.
2. Price your deal carefully
- The deal site will give you advice on the levels of discount you should be offering.
- Be clear about your objectives. Are you looking to make meaningful profit on the deal or using it to build your customer base where your real benefit comes from repeat business?
- Make sure you know your real costs and be VERY careful about offering a deal price that doesn’t at least cover these.
- How much do your customers normally spend with you? If you set the value of your deal below this amount you can realise significant overspend on the deal – more revenue to you.
3. Get your timing right
- Let your deal redemption run for a reasonable time so that you don’t get everyone coming at once.
- Don’t let redemption run forever. A time limit puts more focus in your customer’s mind.
- If you have busier and quieter days, set the redemtion to finish when you are normally quieter in case there is a last minute rush.
4. Think about terms or restrictions you could impose
- Limit the number of vouchers that can be purchased by one person.
- Limit the deal to new customers only.
- Only allow redemptions during times when you are normally quiet.
- Require voucher customers to complete a registration card.
Hopefully these tips will give you some focus on how Daily Deals may work for you. And finally, here are a couple more thoughts: Remember that the Deal Site will take a significant commission from your deal price – don’t forget to include this in your costs. If you are looking to build your customer base don’t forget to record customer details when they redeem their vouchers. We have seen a client assume they would be given a list of all voucher purchasers by the Deal Site only to find out, when it was too late, and this was not the case. Their deal was offered at pretty much cost price so they ended up with a great deal of work for nothing. To demonstrate our approach, I have put together a (dummy) case study showing how the Cupcake company could have made things work out better. Click here to take a look Here is a link I found to a site listing lots of UK Daily-Deal sites