The reviews from small businesses are mixed when it comes to running daily deals on Groupon, Living Social and other daily deal sites. Yet, adding a promotion on a daily deal site to your marketing mix can be a powerful marketing tool when executed properly. Businesses who feel they’ve been burned by the large daily deal companies may have entered into the prospect without a plan. And, planning is the most essential element of running a successful daily deal.
Before embarking on a daily deal, a business owner should first start with a strategy. This includes the classic 4P’s of marketing: product, price, promotion and place.
- Product – The right product or service should be identified well before entering into a daily deal contract. Ideally, businesses should opt to select high margin, repeat purchase products to ensure long-term profitability. Businesses often go into a daily deal contract with the mindset of offering a loss leader and hoping to break even through coupon breakage and the occasional upsell. Yet, with the right product and an effective strategy, this outcome does not have to be the case.
- Price – With the proper product selected, identifying a profitable price should become much easier for a small business. The exciting hook for daily deal shoppers is the deep discount that businesses offer. So businesses should be extremely selective when choosing the product or service they offer. This product or service should be priced so that it is appealing to buyers yet still profitable for their business.
- Promotion – While the large daily deal sites maintain a massive subscriber list, small businesses should be weary of relying solely on the daily deal company to promote their product or service. Taking a proactive approach to marketing their specific daily deal using social media, and other offline and online methods will ensure the broadest level of exposure and a successful daily deal.
- Place – Having a distribution strategy for your daily deal product or service is critical. Whether delivering the product or service to the customer or allotting for a proper appointment scheduling process, the business should take special attention to ensure that the delivery is as smooth and seamless as possible. This will make certain their new customer is happy enough with the process of receiving their daily deal that they will decide to come back.
Once your strategy is in place SELL, SELL, SELL – this includes upselling, downselling and cross-selling to make certain your new customers are repeat, long-term customers who will not only come back, but will refer their friends and family to their new favorite place of doing business.