Daily deals sites: what's the big deal?

The daily deals market has experienced exceptional growth over the past three years. Groupon’s subscriber base has grown from over 152,000 to more than 85 million, while Living Social has surpassed 26 million followers . Last year, Wall Street analysts estimated the global deals market to be worth $3.7 billion (£2.36 bn) and this is forecasted to grow by 200 to 300 per cent by 2015.

With this in mind, it’s easy to understand why group buying solutions for SMEs represent such an attractive way for businesses to promote themselves to local and national audiences. Daily deals sites present companies with the opportunity to grow their customer base and shift stock without any upfront costs. Of course, this is a striking proposition to many, but it’s important to understand the potential impact that using existing deals platforms can have on a business – both good and bad.

In most cases, a business will decide to launch a deals campaign in order to introduce new clients and grow their existing base of customers for future sales. It’s clear that group buying platforms can provide a highly effective way of achieving these objectives. However, deciding to use a daily deals site requires more consideration than may at first be thought. So what are the issues?

Customer service

In order to achieve positive business results, it’s imperative for companies using deals sites to deliver a consistently high-quality customer experience. This may sound relatively simple, but ensuring that internal processes are in place to collate new customer data and track each individual’s experience is vital for future relationship management. Many businesses feel that existing group buying platforms fail to allow them to do this. This not only has a negative effect on a brand’s bottom line, but also its long term reputation.

Deal price

Ensuring the price of the deal covers the internal cost of delivering the offer sounds obvious, but the small print can cause issues. Many businesses, especially those new to deals campaigns, fail to factor in additional costs that arise as a result of higher-than-expected demand.

Non-personalised deals

Many consumers are becoming frustrated with the sheer volume of non-personalised, generic offers that they receive every day. With many deals sites, the only separating factor is geographical location, meaning people receive large numbers of offers that they have no interest in. This means an increasing number of emails from deals providers are going unread.

Internal operations and resources

Planning for the requirement of extra resources is also something that needs to be thought through well in advance. Good value deals invariably bring about an increase in demand for products and services, but it’s surprising how many businesses fail to prepare a strategy to ensure that customer service quality remains consistent.

Redemption and CRM

Let’s face it, for most businesses using daily deals sites, the main objective is to drive new business, either in store or to a website. As such, it’s important that the redemption of deals is tracked and customer data is collated. However, some group buying platforms make it incredibly hard for businesses to access this information. This has a knock-on effect on their ability to increase future sales.

So what’s the answer to these problems?

Social media as a platform for deals activity

Mashable recently reported that one of the main reasons for consumers following brands on Facebook and Twitter is to get exclusive access to special promotions and deals. It’s common for businesses to offer discounts via Facebook to encourage Fans to shop with them and build followers.

Using social media for deals activity has a number of advantages for businesses:

• Once a Fan has ‘Liked’ your brand’s page and granted permission to receive information, businesses gain access to their profile data for CRM activity.

• As a social platform, Facebook allows your Fans to market a brand via their news feed to an extended network of friends and family.

• Never underestimate the power of ‘social’. Consumer buying activities are, by nature, social actions, often undertaken by friends and family. People look for validation in their purchasing decisions in the form of recommendations and reviews. Indeed, consumers are four times more likely to purchase if they see that a friend has bought the same item.

It’s clear that by harnessing Facebook’s viral power, businesses can maximise their brand awareness to drive sales and new customer acquisition, collecting CRM data in the process. That data in turn allows businesses to gain solid consumer insight and so tailor their offers appropriately – to the benefit of customer relationships.

DealsJoy™

With this in mind, and in order to establish a viable solution to the above issues, we created DealsJoy™ – a Facebook deals platform. As a ‘business-friendly’ alternative to Groupon and other group buying services, DealsJoy™ gives business owners a tool to promote and manage deals through Facebook, while keeping all of the revenue generated.

The service enables businesses to launch special offers and daily deals with full control over timings, order volumes and redemption criteria, to carefully manage customer expectations.

Once customers have claimed their deal, they are prompted to share this with their friends on Facebook to virally increase brand awareness. All deal claimants are then sent an email with a unique deal code, which must be redeemed in-store, helping to drive local footfall. Deal redemption is automated online or through a mobile device by the business owner to ensure complete visibility of the customer.

10% discount image via Shutterstock