Rice University has bad news for the likes of Groupon and LivingSocial. Among its findings: Only 19.9 percent of deal users are returning for full-price purchases at restaurants, bars, entertainment venues, events, resorts and other retailers.
The study also found that Groupon promotions offer the most benefit for businesses when the promotion does not cannibalize sales to existing customers. And salons and spas were most successful among the service businesses; Restaurants were least successful.
Daily Deal Success Tips:
- Use promotions for building relationships instead of creating one-time transactions. Businesses must develop a way to keep in touch with customers. Ask them to sign up for future promotions. This may be achieved through email or text message marketing.
- Don’t offer discounts on a total bill.
- Do offer a specified discount for various products or services; Carefully choose promoted items, for example
- select unpopular or items that have been in inventory for too long
- promote underutilized services
- make coupon usable only during low season or slow times. For instance, if you are running a promotion for a restaurant, what is your slowest meal time? Make the deal redeemable only during those hours.
- Introduce new products or services to customers. Consumers often rely on what they’re familiar with and continue to shop those items. Use promotion to encourage them to try something different.
- Keep track of your coupons. Your business gets hurt by some customers who use their coupons over and over again. Use traceable coupons that can indicate previous use and if it is a hard copy retain the customer’s copy.
As you can see a few smart choices and actions you can enjoy powerful results and successfully use daily deals to grow your business.