With the explosive growth of daily deal sites like Groupon, Living Social, SwarmJam, etc., many business owners are starting to believe the hype, and think they have to conform to the masses and offer their services at a huge discount, just to keep up with the competition. This could not be further from the truth.
Now is the time to go against the grain, and promote your business through ways that keep your profit margin intact, while your competitors lick their daily deal inflicted wounds.
Now, some businesses can use the daily deal strategy and still manage a profit, but why would a business devalue their product that much in the first place? In the restaurant industry their is a saying, “Sell dollar beers, get dollar customers.” Do you really want your clientele to be made up of people who are only interested in your product or service due to it being 50% off?
Like most people, I am subscribed to a number of these daily deal sites. I like a deal just as much as the next guy. Of the businesses I have visited, with the exception of the businesses I regularly frequent such as my local movie theater, I haven’t returned to a single one as a repeat customer. In fact, I usually went in expecting sub par service or food or whatever, and I’ve rarely been disappointed. I sub consciously think of each of these businesses as reeking of desperation, and thus often leave with a bad taste in my mouth regardless of my experience.
Being an online marketer, I usually have a look at the websites of the companies who use these daily deal services, to see if I can spot anything that might drive them to give up 75% of their revenue and possibly alienate their existing customer base. The results are usually predictable. Their sites are often un-optimized. I can usually tell that the site is professionally made, but not enough attention has been paid to things like keyword density, title tag optimization, etc. Almost never has a professional link building campaign been done, so the site is rarely ranking on the first page of google. The sites almost never advertise on adwords or any other paid advertising networks.The biggest one thought was that I rarely saw any form of email opt in on their websites. No way to keep contact with their customers, or to drum up new leads. Basically, most of these businesses were not willing to invest $1000-$2000 in their own websites, to increase their businesses exposure, but were willing to give away their products at virtually no benefit to them to up to 1000 people in the hope that they will come back sometime and buy the same thing for double the price, when their competitor down the street is offering the same thing through a daily deal site the next day.
Does that make sense to you, either?
For a good 80% of these businesses, meeting with a marketing consultant beforehand could potentially save them $1000s of dollars. Instead of branding themselves as the place to go to get a product or service at a discount, why not optimize their websites, target their advertising better, improve their position in the search engines (where 85% of offline buying decisions are made) and portray themselves as the premier destination in their market? Sure, the flood of bargain hunting customers won’t be kicking down their doors. Instead, they can build a steady flow of high lifetime value customers, who will appreciate the price they pay. If they are proud of their product or service, let that shine through instead of paying customers to walk through the front door.
If you are thinking about signing up for a daily deal offer to increase your business, please contact us first for a free consultation on your online presence. We will honestly walk through your current advertising and website with you, pointing out any areas we feel could use improvement, and give you an honest assessment of whether a daily deal site would benefit your business.