Daily Deals – Good for Clients not for Companies?
Everyday deals is the latest strategy in web advertising and online marketing. Groupon is the pioneer in this industry and indeed has been successful. However, there are lots of new imitators exist today. One of them is Woot – another daily-deal startup which was snapped up by Amazon.com for around $100 million.
For those who are not familiar with daily-deals, here’s a summary: a business enterprise provides a deal everyday through internet offering big discounts on merchandise – usually 50% off. There is a minimum number of clients who are willing to get the deal and pay for upfront then they obtain coupons that they will present for the business. If there is no enough number of clients for the deal, it will then be canceled.
Professor Utpal Dholakia, an associate professor of Rice University’s Jesse H. Jones Graduate School of Small Business had done some research regarding daily-deals. He asked 150 companies that has been Groupon’s clients previous year. The result is surprisingly unsatisfactory. The respondents said they are unhappy of the deals and the offers are not profitable.
Forty percent of them reported that they will not get any offers from Groupon anymore. The researcher also observed that the clients are just one- time visitors and do not repeat anymore or does not become regular clients.
The researcher suggested that Groupons should improve their services through:
- Ensuring that the deals will hit the market and satisfy the needs of the consumers.
- Designing deals that will not cannibalize the sale to current clients but also encourage the interest of new shoppers.
- Determining if the company will best suited and benefit from daily-deals. The researcher found out that education and restaurants benefit less while spas and salons benefited a lot.
- Offering deals on merchandise that you are looking to discharge or underutilize the services you want to improve.
- Designing deals that will help build better relationship between the company and the clients. For example, offer a 20% discount so that the clients will visit three times rather than offering 60% off all at once.
- Do not offer too much discount for you may lose control of your overall budget. You may end up losing your suppose to be ‘profit’.
Groupons may have went through a lot of hardships, but it is still looking for new ways that will satisfy their client’s needs and bring quality service to the consumers.
+Voupons combines the most effective marketing methods, Daily deals, email, Google and SMS.