Home – New Forums Marketing mastery Daily Deals: Has this marketing strategy burnt your business?

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  • #978714
    dealflip.com.au
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    Hi there!

    Thanks for stopping by and reading this thread. So it’s just been over 7 months since we launched Sweet Business Deals and it’s nearly at the point of 100% automation (just FYI we’re a B2B daily deals comparison site, not an actual deal site)

    During our time being involved in the space we’ve witnessed both the good and the bad that daily deals brings to customers and businesses alike. Unfortunately we’re all too aware of the horror stories that plague the consumer deal sites, especially with a lot of merchants being burnt from using these promotions as a marketing strategy. There’s been examples and reports to back the for and against argument of using daily deals/group buying as a marketing tool and I’m sure that the marketing/sales gurus here can shed light with their own opinions too.

    However, with all the negative media that surrounds this space, we understand there’s still a long way to go before businesses can fully be comfortable with this marketing medium. Which has lead to our new idea that we are currently building.

    In a nutshell our new model shifts the power from deal sites back to the business owners – providing you with an easy way to secure the best terms to run a deal by allowing these sites to “compete” for your business. This platform will be absolutely free to use so the advantages are all there for the business owner.

    We’ve validated the idea with Senior BDMs and founders from some of the BIG 8 and middle tier deal sites in Australia – so they’re willing to give it a go, which is a big plus for businesses who are likely to run deals in the future.

    So now we need to research and gather feedback from businesses who have ran deals in the past, I know there are a few of you here who have experienced both the consumer and B2B sites. We need to find out how your previous experience was and what problems need to be addressed to make the industry more favourable for business owners.

    If you’ve ran a deal previously or know someone who has, please check out our survey below. It’s mainly multiple choice and will most likely take you about 2 minutes to fill out. Your small effort will go a long way!

    http://www.surveymonkey.com/s/JXMXGHS

    Thank you for reading up to this point and feel free to share!

    Cheers,

    Paul

    #1109019
    Tall Trees Eco Store
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    Hey Paul,

    I just filled you your survey but I wanted to add a few extra things in this forum.

    I had a very bad experience. It wasn’t entirely their fault, I should have worked through it better. However the process was rushed, there was not enough information given and it focused mainly on the $$$ that I would received. It was about the money (fair enough) and nothing at all about the repercussions.

    I knew the deal was pretty cheap but I was told that ‘statistically 30% won’t redeem the voucher’ AND ‘people will buy more’ AND ‘you will get returning customers’. Interesting.

    I should have realised it was less about me and more about them when I first proofed the ad. My bar sells a lot of craft beer and I wanted to use a photo of a particular craft brand however they wanted me to use a stock photo of a corona bottle because ‘it would sell more vouchers’. This almost ended in all out war when I just refused to use the corona image and was told ‘you won’t sell as many vouchers now’. We sold 1100.

    The voucher was valid for 6 months and 1100 is doable over that time. However I wasn’t told that a lot people want to use it within the first few weeks and a majority within the last week. The first few weeks was fine; we could book people in advance if you can’t seat them. The last week, not so good. I actually extended it for 2 extra weeks to try and cope. The voucher specifically said ‘bookings essential’ and of course I had people showing up on the very last day expecting to be seated. I received bad online reviews because ‘the manager (me – owner working my butt off) wasn’t able to seat us even though we had a voucher and it was still valid (the very last day AND bookings essential)’.

    So there for :

    In the end we lost money. The deal was too cheap and we extended it 2 weeks.

    We sold too many. We could have coped with 1100 vouchers over 6 months however not when a majority leave it to the last minute. I wish I was given more advice on capping.

    The demographic was wrong. I didn’t consider impulse buyers and people who didn’t research the business before purchasing a voucher. We obviously have a target market and a great deal of people fell outside that. We also had people driving from the Gold Coast and Sunshine Coast (we’re in Brisbane). So not a great deal of returning customers.

    The bad reviews. The reviews are based purely on not being able to get a booking. I spent up to an hour explaining to individual people that we had extended the voucher to accommodate and that is says bookings essential. It still it wasn’t enough. I even had one person threaten to contact A Current Affair because they couldn’t use their $29 voucher. I talked him out of it and he actually wrote a review in response to the negative ones telling MY side of the story (bless him).

    Ok. I’m not trying to be (too) bitter about this and I realise (now) I could of done a great deal more research. It was one of the most stressful times I’ve ever had. I tried so hard to make everyone one of those 1100 (minus 30% for unredeemed) vouchers a good experience.

    In conclusion :

    I’ve learnt a lot and know exactly what to do and not to do. Paul, it would great for those small business owners to have someone working with them.

    Thanks to all who just read through this novel of a post :)

    #1109020
    JacquiPryor
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    I’ve done the survey too, and agree it would be great to have a bit more ‘business owner’ focused information there.

    Thanks for sharing your experience Jodie. Sounds to me like you did everything you could for your customers given the circumstances… I imagine others looking into these sorts of deals can learn a great deal from your post (I know I have!) So, thanks :)

    #1109021
    dealflip.com.au
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    Tall Trees Eco Store, post: 121166 wrote:
    In conclusion :

    I’ve learnt a lot and know exactly what to do and not to do. Paul, it would great for those small business owners to have someone working with them.

    Thanks to all who just read through this novel of a post :)

    Hi Jodie,

    Thanks so much for doing the survey and your very detailed reply (not a novel :) ) I’m sure a lot of people will get some value out of it as I have.

    Hoping to speak to you more about your experience. Will PM you shortly.

    Thanks again!

    #1109022
    dealflip.com.au
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    JacquiPryor, post: 121171 wrote:
    I’ve done the survey too, and agree it would be great to have a bit more ‘business owner’ focused information there.

    Thanks for sharing your experience Jodie. Sounds to me like you did everything you could for your customers given the circumstances… I imagine others looking into these sorts of deals can learn a great deal from your post (I know I have!) So, thanks :)

    Hi Jacqui,

    Thanks for completing our survey! I’ll definitely be in touch when we get things rolling :)

    #1109023
    dealflip.com.au
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    Thanks to everyone who has filled in the survey overnight, great info coming through. Look forward to reading more about your experiences :)

    Cheers,

    Paul

    #1109024
    DaveShireTheCashflowGuy
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    Thanks for the post Paul and also thanks Jodie for your story. I am about to look into doing a deal like this for my business with some training events later this year and this is very useful information.

    I would be looking forward to hearing more about this.

    Jodie’s story is quite empowering and a great learning experience. I know that if I was to run something like this and people just turned up with the voucher (without booking), I would want a plan on how to deal with it so that the client can still have a good experience. What would you do differently next time?

    Thanks again guys :-)

    #1109025
    dealflip.com.au
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    DaveShireCashStrategist, post: 121283 wrote:
    Thanks for the post Paul and also thanks Jodie for your story. I am about to look into doing a deal like this for my business with some training events later this year and this is very useful information.

    I would be looking forward to hearing more about this.

    Jodie’s story is quite empowering and a great learning experience. I know that if I was to run something like this and people just turned up with the voucher (without booking), I would want a plan on how to deal with it so that the client can still have a good experience. What would you do differently next time?

    Thanks again guys :-)

    Hey Dave,

    Thanks for sharing your thoughts, glad you found some value out of Jodie’s experience. Make sure you also think about the following when running a deal.

    What are you objectives/goals? Is it for pure profit, brand awareness etc.
    I’ve heard of instructors/speakers running there initial deal at a complete jaw-dropping price (in other words at a loss to them) but then implementing strategies to sign up their new customers to a 6 month training program/course – obviously where they make their money. Make sure that the deal site you go with UNDERSTANDS your goals too.

    Ask the deal site what support they will be offering you during and after the deal period and how will you get paid. There are various trading terms, especially with the smaller niche sites so it’s good to shop around.

    Also tell them to come up with 2-3 strategies that you could implement to try and upsell or retain these new customers, tell them to be specific to your particular business model i.e 10% voucher off next training seminar etc.

    Hope that helps a bit, hopefully Jodie jumps in to share more :)

    #1109026
    SavvySME
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    There’s some really great insights, and it’s great you have taken what you have learnt and really applied it. I’m curious to know how would your model be different to something like service seeking who have also got a similar bid model.

    #1109027
    dealflip.com.au
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    SavvySME, post: 121340 wrote:
    There’s some really great insights, and it’s great you have taken what you have learnt and really applied it. I’m curious to know how would your model be different to something like service seeking who have also got a similar bid model.

    Hey SavvySME,

    Thanks for the comment. Our model touches similar points to service seeking, but differs in many aspects too. There is no formal bidding process, obviously quotes and terms can be directed to the business so they can make an educated decision on which site they go with, but there are other aspects in the process that need to be tweaked completely to match the expectations of both businesses and deal sites alike. We’re getting a lot of positive feedback from both sides of the spectrum so I think we’re on the right track to service this part of the market.

    Cheers,

    Paul

    #1109028
    Tall Trees Eco Store
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    What would I have done differently? Not do the deal :)

    Seriously though, first thing is capping the amount of vouchers sold. You still run the risks that I outlined earlier (last min bookings, walk-ins, need for extensions) but it’s manageable. You’re not outlaying extra costs for more staff, more linen, cutlery etc. If you have to extend it, you’ve already prepared and have included this in the total cost estimate for the entire campaign. You just need to find that ‘happy cap number’ so the deal is worth it. You don’t want to go through it just to cap it at 20 vouchers since you’re not getting any marketing benefit. You really need to at least get to that break even point.

    I would only consider doing it again if it could be more demographic specific; age group, likes etc. Eg. you only receive the emailed daily deal after you’ve signed up using specific targets. Or when you visit the website you need to enter these details and the daily deal is matched based on this criteria. Perhaps this is financially limiting to the daily deal business however if I knew my customers were targeted specifically to me and that there was a good chance of them returning, sure I’d consider doing it again. I see a lot of value in that. As you can imagine, selling 1100 vouchers in 24hrs, I was hot property so I had a million groups calling me to get my business (we made approx. $11 000 in 24 sweet hours for the daily deal site). Unfortunately I said no to every single one ESPECIALLY the deal site I want with when they asked me to go again.

    Obviously this is a hospitality/service point of view.

    Paul, you’ve really hit the nail on the head. The power should be with the business owner. The amount of money being generated for the daily deals sites is unbelievable. I think I’m in the wrong industry :)

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