New daily deal sites are popping up every day. The early reaction from small businesses was overwhelmingly positive. Where else could you get consumers to buy from your small business so easily and in such large numbers? Then, as small businesses started to get experience with the deals, the sentiment changed. Small businesses have lost money on deals, and didn’t have enough staff to accommodate all the new customers. That being said, daily deals can be very beneficial for your small business, if you have a strategy to manage the increased volume and are careful to have a plan in place to achieve the proper pricing margins. Here are our top 5 tips for how to succeed using daily deals in your small business.
Know what you’re getting into. There is a plethora of daily deal sites, and the terms do vary, so make sure you shop around and choose one that is a good fit for your small business. You will need to ask a lot of questions to determine the best daily deal site for your small business. Choose a daily deal site that has an audience profile that fits your target market.
Make sure you know your ROI (return on investment) and analyze the data. Calculate your costs and base your deal on what you can afford to lose. For instance, in some businesses, having a flood of new customers doesn’t necessarily mean you need to spend more money. Others, however, will need to calculate the additional staffing cost so a cost-benefit analysis will be important. If you don’t know how to calculate your ROI, we suggest getting help from a professional. In addition, make sure you keep track of who bought the daily deals, what they bought the day they redeemed their deal, and what they bought afterwards.
Have a goal and create a deal that will help you meet that goal. Do you just want “feet through the door”? Meaning as much traffic as possible? Or do you want to create a high quality experience that will appeal to a select few? Both strategies can be effective, depending on your goals.
Plan for the surge. Poor planning can lead to failure, especially for daily deals. It’s very important that you plan and staff your small business to support the number of daily deals sold. One of your biggest goals for daily deals is to turn first time customers into repeat customers. If you don’t staff accordingly to ensure a positive experience for these first time daily deal customers, you can be fairly certain they won’t be a repeat customer.
Connect with your customers. Give your customers a way to connect with you on social media sites and encourage them to interact with you. Ask for their email addresses when they check out. The more ways you can interact with them, the better! You want to keep the relationship as “sticky” as possible. After all the effort you’ve put out to get these new customers in the door via a daily deal, you of course want to keep them as repeat customers!
What is your experience with daily deals? Have they been successful for your small business? Tell us about it!