Using Deal of the Day Sites for Your Business

Using Deal of the Day Sites for Your Business
September 12 & 13, 2011
Shannon Scanlan
Business Services Librarian
sscanlan@ahml.info

What are Deal of the Day Sites
A deal a day is offered.
If a predetermined amount of people sign up for the deal, it is opened to all. If minimum is not reached, no one can purchase the deal.
There are over 500 sites worldwide and over 100 in the US.
Google and Facebook are interested in starting similar services.

Types of Coupon Sites
Group Buying
Partnership between companies such as Groupon and small business owners
They use their extensive database of email subscribers to market the business and offer the deal
Most companies take 30-50 % of the revenue
Most sites offer 1 deal a day or multiple deals for 24 hours
Flash Sale
Different product or designer offered a day
Travel destinations

Let’s Start with the Big Ones
Groupon
Launched in November 2008
Predicted to be the fastest business in history to reach 1 billion in sales
Subscribers went from 2 million to 85 million in the last 18 months
Groupon says 94-97% of business owners would run another deal with Groupon
Deals include Getaways
Living Social
Launched in July 2009
Fasted growing e-commerce business
Subscribers went from 120,000 to 40 million
Deals include Escapes, Adventures, Families

Who is Using Daily Deal Sites?Survey from http://www.businessinsider.com/groupon-survey-results-2011-3#the-vast-majority-of-our-readers-who-are-a-tech-savvy-bunch-said-they-use-groupon-plus-few-people-are-going-to-click-into-a-survey-about-groupon-if-they-dont-use-it-1943 responses, 811 use Groupon (86%)

Use One, Use Another72% of Groupon users also use Living Social

Coupon Sites
AppSumo-digital products and services
Blackboard Eats-restaurant deals
Buywithme-local deals, share with 3 it’s free
Daily Herald Deals-local deals
Deal On-local deals
Gleeday-local deals
Groupon-local deals
Jettsetter-vacation deals
KGB Deals-local deals
Living Social-local deals
Mulamu-local deals, % of revenue to charity
Scout Mob-local deals
Sudden Values-local deals
Wahanda-health, beauty, happiness deals
Woot-24 hour gadget sales

Too Many Deal of the Day Sites?
Try Yipit
http://yipit.com/
Yipit will send you one email with filtered selections of the deals you are interested in from 668 sites including Groupon, Living Social and dozens of others

Deals When You Need Them
Groupon Now
Deals offered during a set time of day
Customers find them by using the Groupon mobile app or the Groupon website and entering their zip code
Business owners specify when the deal can be redeemed such as a slow time of the time
If the customer cannot redeem the deal during the set time of day the purchase price will be refunded to the Groupon user
A good idea for a first time Groupon user to test if they will be able to handle the larger influx of a traditional Groupon offer

Business to Customer
Market their business
Brand awareness
To attract new customers, increase customer base
As a social media tool
Business owners can track the customers who use the coupon, new or repeat customers

Business to Business
Bizydeal.com-invites and referrals from colleagues, advertisements and friends
Groupprice.com-Daily deals for your business

Groupon

Groupon Getaways

Groupon Now

Living Social

Living Social Families

Living Social Adventures

Sudden Values

Gleeday

AppSumo

What You Need to Think About
How will you reach the right customers with the right information?
Can you handle the high volume of customers?
Can you offer something with little or no prep time?
How will you communicate to staff about increase in workload and sales?
How will you track the Groupon users?
Will you limit the redemption time for the coupon?
Will you require customers make a reservation?
Can you give the same service in another way (coupon on your own website)?

Testimonial from a Business Owner
I was a regular user of Groupon for dinner certificates and massage deals. While redeeming a Jewelry making Groupon I asked the business owner if it was a good deal for her, she expressed that it was a cheap way to get her name out. I own a campground in Southwest Michigan and advertising is my biggest concern. Once people get to us they usually love us. So, my challenge was to find the most economical way to get our name out there. Before I called Groupon I thought about where we get the most guests coming from, for us it was Chicago, Kalamazoo, and Grand Rapids. Kalamazoo was the smallest town out of those three so we went with that as a test. We are a small business and we didn't want to be overwhelmed with guests that we could not service. The Groupon representative asked us what is the average stay for our guests, it was two nights. So the deal was two nights for 50% off. Our regular rate is $18 per night, so the average guest would spend $36 for their stay. The Groupon clients paid $18 and Groupon keeps half of that, so we ended up with $9 per Groupon sold. They set the redeem date for November of the same year, but it was up to us, I think 1 year is standard. The Groupon rep was very responsive to our questions and concerns. I called him several times throughout the process and he either answered the phone or got back to me the same day. He sent us a preview of the deal and they had used a different picture than the one I provided. It was a girl with her head out of a tent in full sun on grass. Our campground is all wooded and therefore shady and the sites are not grassy. So I asked that it be changed and they did.
We made it not valid on holidays and special event weekends, because we do not have a problem filling our sites on those weekends. We also made it valid for tent sites only and not our cabins, because they fill up and cost us more to maintain. The offer ran for 3 days, the first day as the main deal and 2 more days as a "side deal". We sold 97 in Kalamazoo, the Groupon representative said he thought it would do better than that, but we were very excited about the 97 new guests who had previously never heard of us. We also had a few reservations from people who wanted a cabin, but said they heard about us on Groupon. The Groupon rep called us back about 2 weeks later and asked if we wanted to be a "side deal" in the town of Lansing (about an hour from us). We said yes, and it ran for 3 days, we sold 30 more. When I used my personal Groupons, I noticed that owners gave us a further deal, so I made a return discount card for all the Groupon guests for 10% off their next stay. We also made additional money from each guests on other purchases such as firewood, boat rental, and additional nights. It was a very good deal for us and we are planning to do a deal in the spring in Chicago, but we are planning to limit it to 300 sold so we can provide a good experience for everyone who purchases one. We also promoted the deal on our Facebook and Twitter pages, so our regular clients would not feel they missed out and so they could tell their friends.We did end up with one or two unhappy guests, who said it just wasn't for them, but overall, people seemed happy to have found a great place to camp that they had never heard of before.
Rose's RetreatCampground Owner

More Tips
Deal-a-day websites and Revenue Boom
http://seattletimes.nwsource.com/html/businesstechnology/2015130357_dailydeals24.html
Groupon Social Coupons-Report from Rice University
http://promomagazine.com/incentives/news/groupon-social-coupons-unprofitable-1020/
Groupon Help
http://www.grouponworks.com/merchant-services
Groupon Now
http://thenextweb.com/insider/2011/05/10/groupon-now-is-live-offers-local-deals-at-any-time-wherever-you-are/
Want to know the numbers?
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1863466
Groupon and Small Businesses
http://money.msn.com/shopping-deals/will-groupon-wreck-your-dinner.aspx

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Using Deal of the Day Sites for Your Business

by Shannon Scanlan

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