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Online Daily Deals

There are instances when the various online coupon sites make strategic marketing sense. But before we examine how to use these tools effectively, let’s consider the pitfalls.

“Daily deals, local deals, group-buying deals,” says Amy Fowler of MarketingProfs, “Call them what you will, but they’re all the same thing; a very expensive form of marketing that can run a small business into the ground if utilized incorrectly.”
Why?

  1. Many businesses forget to include the huge discounts they have to offer to get ‘results’ on a deal site, as a marketing cost. That’s right, discounts are a marketing cost. For example, if you normally sell a pizza for ten dollars, but have to discount it by five dollars to get a response from an online coupon, that five dollar discount is unquestionably a marketing cost.
  2. Most deal sites take a piece of every discounted sale. In other words, the more you sell, the more you pay. Your marketing cost goes up with every sale.
  3. The type of customer who follows deal sites can seldom be developed into a loyal customer. They’ll leave you as soon as your competitor offers a deeper discount.
  4. Online deal sites can compliment, but certainly not replace, branding campaigns. If a well-branded Coca-Cola offers a 50 cent discount, for example, it will outsell an unknown Smith’s Cola offering a 60 cent discount. Branding counts!
  5. There is a danger you will develop the discount habit, where customers will only buy when there is a ‘deal’.
  6. There is always a benchmarking risk. Selling your ten dollar pizza for five dollars, can make its perceived value only five dollars in the minds of some consumers.

But in today’s economy, there is no denying a huge portion of the marketplace is looking for ‘deals’ and executed properly, offering online deals might be strategically correct for your business.

Click here for me to deliver our How to Make Online Deals Work for You.