Marketing Fun Friday: 8 Questions to Answer Before Running a Daily Deal
Posted by Megan Webb-Morgan on May 3, 2013 in Sales 2.0 [ 0 Comments ]
Daily deals – promoted online, through email or mobile – can be an effective way to engage new customers with your business. Last year, 26% of businesses were “very likely” or “extremely likely” to utilize an online deal of some type and consumer spending on online deals is projected to reach $4.4 billion in 2013, an increase of 23% over 2012 (BIA/Kelsey).
Before you jump on the daily deal bandwagon, however, you should take into account some special considerations. Ask yourself the following eight questions to determine whether running a daily deal will benefit your business or bust your budget.
1. Are you running a daily deal for the right reasons?
Flash sales and daily deals serve several very specific functions: they help you expose your business to new customers, increase your presence in search engines, and help you dispose of excess inventory. They are not meant to generate large amounts of revenue immediately. If you’re behind on your bills and need a quick influx of cash, look for a different type of promotion.
2. Is the deal in line with your marketing and business goals?
Consider how a daily deal fits in with your current strategy, and whether it would interfere with any campaigns you have running concurrently.
3. Is there a history of successful daily deals in your business sector?
Daily deals are effective for businesses that experience regular, high traffic and repeat patronage. Restaurants, salons, retailers, and movie theaters all can use daily deals to great effect, whereas dentist offices or auto body shops may not. Make sure your business can benefit from a one-day promotion.
4. Is there a history of successful daily deals in your local area?
Whether your location is urban, suburban, or rural and what type of markets are popular in your area all factor into the success of your promotion. Check with your daily deal provider and other businesses to find out how well daily deals work in your local area.
5. Does the online partner cater to your audience?
Your business may be a perfect fit for a daily deal – but part of your success is determined by your third-party provider. Do your research to make sure the provider caters to your audience and caters to your business’s needs.
6. How will the deal affect your current customers?
Part of your research into the applicability of a daily deal to your business should be determining whether your current customers will take advantage of the deal itself, or resent your business for giving a deal to new customers while charging loyal customers a higher price.
7. Will the deal have a long-term impact on your customer base?
Bringing in a high volume of traffic to your business is a great opportunity to gain new customers. But after the promotion is over, will those customers stay with you, or will they move on to the next business that runs a deal?
8. Is it worth the cost?
Daily deals tend to offer dramatic discounts on your business’s products and services, sometimes even at a loss. There is also the cost of running the deal, including the fees charged by your provider and any extra marketing you do to advertise it. You will not make money running a daily deal. The cost of the running the deal is worthwhile only if it benefits your SEO, brings in new long-term customers, or helps you clear out costly overstocks.
While daily deals are becoming increasingly popular with businesses and consumers alike, they are not for everybody. Closely examine your business sector, local influences, customer base, and promotion provider before committing to a daily deal promotion.