What’s involved?
For those of you who haven’t come across the daily deal phenomenon, it’s a web-based marketing mechanism that allows businesses to offer bargain (never to be repeated) pricing on experiences, products and services for a 24-hour period. Customers buy the deal from the website direct, and depending on the terms and conditions, are then emailed a voucher to use with the business providing the product or service.
From a business owner’s perspective, participating in online daily deals comes at no upfront cost. The deal company takes a percentage or commission of each sale and all the business needs to do is come up with a package to sell.
Case study
I’m not usually a fan of discounting, and can certainly understand the concerns many business owners raise about offering bargain basement prices. However, as a marketer I have seen first hand how online daily deals can have very positive outcomes for a business, as this case study shows.
Background: My client, a hairdressing salon in Melbourne, went through a number of changes that resulted in them needing a unique, low-cost marketing plan that was going to yield quick results.
Solution: A daily deal promotion fit the bill because of its ability to deliver instant new clients and immediate cash flow, using existing excess capacity in the salon, without financial outlay. As the salon didn’t want to gain a reputation as a ‘bargain bin’ destination, my client was pleased that the deal site would run the promotion, ensuring a degree of separation from their own brand.
Promotional offer: After discussing a number of scenarios, it was decided to offer a high-end keratin hair treatment worth $500 at the price of $149 via Scoopon. This particular promotion was chosen because it’s a premium product that’s relatively new in the Australian market, and the results last longer if additional products are used, making add-on sales possible.
Execution: In addition to advertising the deal to Scoopon’s subscribers, the salon sent emails to a selected segment of their own database to ensure current clients who weren’t prepared to pay full price for the treatment were still able to get in on the deal.
Results: We expected to sell 80 deals, but the results were nearly double that, with 158 deals total being sold in the 24-hour period. One in five of the clients booked in for additional services and two out of three clients bought products, resulting in over $3000 worth of incremental sales. With careful follow-up, many of those new clients could turn into repeat customers too.
Bonus: Due to the large volume of treatments, the salon was able to negotiate a better deal with their suppliers, which will enhance their future profitability.
Proceed with caution
There’s no doubt that daily deal sites lure business owners with the vision of lots of new customers without up front costs. It would be easy to say yes to a deal price without thinking through the implications.
But keep your head on your shoulders, and before you agree to anything, make sure that you’ve assessed it fully, and are very clear about whether participating is going to make you money or cost you money. Obviously you’ll want to establish a deal that’s right for your business.
Once the decision is made, the copywriting, images and numbers of deals sold are all slightly in the hands of the provider. Simple.
Have you marketed your products or services on a daily deal website? Please share your experiences of online daily deals with us, regardless of whether they’ve been good or bad.
“ There’s no doubt that daily deal sites lure business owners with the vision of lots of new customers without up front costs. It would be easy to say yes to a deal price without thinking through the implications. ”
Jo Macdermott from Next Marketing works with Business Owners in Melbourne who require ongoing Marketing support. If you are a Business Owner with a Marketing budget who is too busy to ‘get around to marketing’ then Jo Macdermott is here to help. Jo specialises in tactical Marketing plans that are pragmatic and make a lot of business sense.
