If you’re just starting out or need a quick boost in exposure, you may want to consider daily deals as part of your strategy. Daily deals sites like Groupon and BuyWithMe offer highly incentivized offers (of 50% off or more) to consumers in exchange for a promotion to hundreds of thousands of prospects. However, the remaining 50% is often split 50:50 between your business and the daily deal site.
So why would a small business offer a daily deal?
From a business perspective, gaining exposure to your audience is the first step in marketing. Only when a customer knows who you are would they even consider purchasing your product or service. The benefits of a daily deal service is that:
- your company, brand message and offer is shown to a large audience
- certain businesses are allowed to negotiate higher revenue splits with the daily deal provider
- you can cap the number of offers you make available
- you can set up the deal so that it is only valid if a certain minimum number of people purchase it
- it can help push slow inventory
- anything spent above the initial offer is yours to keep
- it helps generate sales during slow periods
- some customers do not use the deal, meaning that you are paid without having to ship your product
- the daily deal site typically absorbs the credit card fees
Best of all it is risk-free as you pay nothing upfront. Let’s run through an example…
Say you are a restaurant that offers a $30 coupon for $15 and you split this 50:50 with the daily deal site. If you sell 1,000 coupons, you earn $7,500 plus 1,000 customers over the coming weeks and months.
Now, if you had NOT done the offer and if those same 1,000 customers would have paid full price ($30), your revenue would have been $30,000 (a difference of $22,500). The question is, can you acquire at least 1,000 customers with that $22,500? ie is this a better way to have spent this money, if you had it in the first place?
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