Everyone loves a sweet deal on a product or service especially at over half the going rate. As an avid researcher for a site comparing internet fax services, I come across tons of deal related information and websites and I have to admit, I’ve been roped in and have taken advantage of a few Groupon deals myself. But with all the trouble websites like Groupon have experienced, is this form of free advertising benefiting the small business owner or creating epic business failures or even worse, complete business shut downs?
A Few Quick Stats on Group Deal Sites
Statistics according to SocialMediaExplorer.com show that:
- 15% of Americans are signed up for a daily-deal site or service
- 66% of those users are women
- 62% of daily-deal users are using them as frequently or more frequently than when they started
- 53% of users tried a business or service specifically because of the deal offered
- And 23% stated they continued using the business after the deal was redeemed
So, how can you take advantage of this advertising outlet and obtain repeat customers without experiencing an epic failure?
Here are 5 steps to take to prevent a total business meltdown and increase repeat customers:
1. Pre-Plan for Before and After the Promotion
Thoroughly think through what you want, and are willing, to offer to build repeat business and how you will attract the right customers. You don’t want to cheapen your services and attract customers who will not return. One way you can avoid this is by offering services in bulk or as a packaged deal. Some spas, salons, or gyms can do this. You also may want to offer up a follow up service with a cost not as steep as the first coupon or a preferred customer service program that takes effect after the second visit.
If you have a service or product that cannot offer such packages like a restaurant, provide a coupon or some other type of incentive that gets them in again but doesn’t take away from your bottom line.
2. Ensure You Have Financial Resources Available
Deal sites don’t pay out until the promotion is over and some don’t pay in full but in bits and pieces.
Make sure you plan for your out of pocket expenses vs. getting only a proportion of the price for your product.
Plan your budget wisely. Ensure that the price point fits your business by doing some quick research on similar businesses and markets.
Don’t let lack of information and research create a $20,000 mistake from not setting the right price points or lack of staff for a deal that turned overnight success like these small business deal- site disasters. Deal-sites will haggle with you so don’t be afraid to go after a price point that will benefit you and satisfy the deal-site.
3. Get Your Customers Info!
The email addresses and customer information received through the deal-sites are their property and are unavailable to you. You want to remember to gather the customer’s information when they come in to redeem their coupon so that you can have future contact on other deals or events that you may offer in order to lure them back.
4. Plan for Procrastination
People procrastinate. They make a quick decision on line, forget about the coupon, or get busy and realize that the coupon is expiring soon and they need to redeem the voucher. Always keep this in mind and have time set aside for procrastination to be a possibility. Set aside for the last few weeks of your promotions expiration date to have more staff if needed, supplies, and additional resources.
If you have a service such as a gym with a limited number of spaces in your classes, use the expiration date as the last date to sign up so that you don’t have to turn people down because you are unable to accommodate the number of customers. Or, you can simply plan to honor the deal past the due date if necessary and you have the ability.
5. Research your Deal-Site Source
Tons of deal sites are popping up every day. You want to make sure that the site you choose is a reputable source and won’t be closing down anytime soon creating the inability to pay you. Read their terms of service so you know exactly what you are getting and don’t be afraid to ask questions! They are here to help you!
Deal-Sites such as Groupon or LivingSocial can be a great advertising avenue for your business and don’t have to lead to a complete failure or profit loss. It is your responsibility to make sure this is the best decision as with any decision you make for your company. Put these tips to use when getting up and running on your deal-site campaign!