Whether you’re looking for a hot yoga class or a hot new restaurant, daily deals sites have become consumers’ go-to sources for deeply discounted prices and special packages. With these deals, businesses can appeal to a fresh audience, and consumers get a new experience at a great value. A win-win.
But who’s using these sites? And should your business give it a go?
Forty-eight percent of consumers have used a daily deal site like Groupon or LivingSocial, according to our recent survey. Within that group millennials, xennials, and Gen Xers are more likely to have tried one of these sites than people in higher income brackets.
Our survey of 1,800 U.S. consumers — which highlights trends on how they discover, choose, and recommend new businesses — also found that 35 percent of people who used a daily deal site have purchased a voucher to try a new place, while 32 percent sought out discounts from a familiar business.
If you’re considering a daily deal site to market your business, the fact that more users than not have purchased deals to try a new place is promising news. Even better, the coveted millennial, xennial, and Gen Z demographics are more likely to have purchased a deal to try out a new place than people in higher income brackets.
The survey found that 78 percent of respondents think offering a deal through something like Groupon has a positive effect on their perception of the business. Said one respondent:
“Groupon helps businesses get noticed, and when they are noticed, you gain a relationship with them. This makes it easier to go back again for goods and services.”
However, this positive response doesn’t mean that you should get overzealous with posting offers on deal sites, or you could look desperate. Here’s how another respondent perceives businesses on daily deals sites:
“It can go either way. It can mean they are new and trying to get business or they are established but have lost business because they have gone downhill. If they are always on there it tells me the everyday prices are overpriced.”
So, you must be strategic about when and how you offer deals to ensure that consumers get a favorable impression of your business. If consumers see you post deals frequently, they won’t feel a sense of urgency about purchasing because they might assume they can buy it anytime. Worse, posting too often might also dissuade people from buying because they might get the impression that your products and services are too expensive or low quality.
Make a strong impression with your first deal by offering a discount or package that is appealing enough to get new customers in the door. You’ll want to cater your offering to appeal to your ideal new customer and to compete against similar businesses. You’ll also want to take into account seasonality; if it’s Valentine’s Day and you run a restaurant or a salon, you’ll want to make the deal really special to stand out.
Of the people who’ve bought daily deals, only eight percent said that they’ve never gone back, while 18 percent said that they return extremely often. So, once a customer has purchased your deal, you need to make sure that your interactions before and during the initial visit leave a good impression.
When people call to make an appointment or reservation and reference the offer, make sure you have a process in place that makes using the offer simple and easy (this is a common complaint about using daily deals). Make a note that they are new customers to ensure they have a positive impression of your business. If you have the resources, offer a little gift or freebie to make the experience extra special — whether that’s sample products from your salon or a complimentary appetizer.
Once customers visit your business in person, check in with them to see if there’s anything you can do to improve their experience. Better yet, offer them a modest discount on their next purchase to entice them to return.
Once you’ve run your first daily deal, do some analysis to determine its impact on your business. Questions you might ask include:
- How many of the deals purchased were actually used?
- Of those that were used, how many of the customers were new versus return?
- Of the new customers, how many returned after their initial visit?
- How many sales can be attributed to the deal? Was it ROI positive?
One way to track these data points is to ensure that you have a point-of-sale system with an integrated customer directory and analytics. This will help you better evaluate the success of programs like this so you can decide whether or not to invest more.