01 Apr 2012
Groupon and daily deal sites are projected to be worth over $4.2 billion by the year 2015*. There are dozens of daily deal sites,
although most of them operate in generally the same way; for small business owners, these daily deals can make or break a business.
Thinking of a Groupon? This $20 class can save you thousands. CLICK HERE to REGISTER.
The way daily deals are structured
Generally, daily deal services are structured in such a way that both the merchant and the daily deal service both make money in some way. Groupon splits the income from the daily deal half and half, and requires a 50% or more discount on the product or service.
For example, a Groupon that costs $10 must be for a product or service worth $20. The merchant gets $5 of this income, and Groupon gets $5. Most daily deal sites also charge a credit card processing fee of between 1 and 3 percent. At the end of the day, this means the merchant gets approximately 22% of their usual charge for the item included in the coupon.
Each daily deal site pays out income from their deal differently; some in one lump sum, though many pay out in smaller installments.
The benefits of running a daily deal
For business owners, there are a multitude of benefits associated with running one of these daily deals.
- Very targeted customers: Generally daily deal sites offer very tightly controlled targeting of their customers, based on age,
previous buying habits, and geographical area. There are also daily deal sites that aim for a very targeted demographic; services such as Gaypon, for example.
- New customers: Many of the customers that purchase and use a daily deal are customers that may not have otherwise spent the money to visit your location or utilize your service; these new customers can be a much-needed shot in the arm for a business.
- Social presence: Most daily deal website users are already comfortable with the web and social media. Running a daily deal means attracting customers that are already primed to use social networks and offer their opinions on your business to friends.
- Search Engine Optimization: The spike in traffic, topical links to your website, and social media discussion of your business that will happen the day a daily deal runs with your business can do great things for your search engine optimization, if your website is ready for it.
There are a multitude of benefits to running a daily deal, but unless you are truly prepared for the onslaught, then a daily deal can ruin your business. There are hundreds of thousands of stories online of businesses that have been put out of business by their Groupon or daily deal. Before you decide to run a daily deal, you should carefully consider:
- The cost of the deal: In order to run a daily deal, you will likely giving a discount of 75% or more to every customer that uses
the coupon. Consider if your busienss can take that kind of a discount, and if not, then running the deal may not be worth it.
- Utilizing the information: You can get a wealth of information from and about the customers that buy and redeem your deal. If you do not yet have the structure to utilize the information in the future, however, then it may not be worth the cost.
- If you are prepared: A daily deal means several large spikes for your business. A spike in website traffic, a spike in orders the first few days, and another spike a few days before the deal expires. These customers are also very vocal and very likely to share, so if you are not prepared to handle the onslaught, you could do more damage to your businesses’ reputation than you could help.
So – should you run a Groupon?
So, in the end, should you run a Groupon or other daily deal for your business? The answer depends on if your business is prepared for the deal, and if you can structure the deal in such a way that the deal will not drive your business out of business. Do the math very
carefully, know your goals for the deal, and structure it in such a way that you can turn the one-time daily deal customers into a boon
for your business, rather than a drain.
To learn more about doing a daily deal the right way, check out Groupon – Deal Sites the Right Way on Tuesday, April 3 at noon at Nectar Media. 120 N Stevens
30 Nov 2011
Last week, I had the opportunity and good fortune to share my Thanksgiving wine picks with Spokane area wine lovers on KXLY920 radio station and KXLY TV’s Good Morning Northwest show. While some may think of me as a media whore, I love these opportunities to showcase Spokane wine and of course Nectar Tasting Room. While these opportunities sometimes seem to come out of the blue, they are not by accident, they are by design. The great thing is that anyone can develop the relationships they need for success in their industry.
Over the last few months I’ve been doing quite a bit of thinking on “relationship marketing” and building strategic connections; so much so, that I’ve started a book about the subject (only on chapter 3 of 12 right now). While I may not “do” relationships and networking correctly all the time, I have seen the power of these strategic connections in action these last 12 months. Here are three tips for turning online relationships into offline success.
1. Be genuine
People can spot a phony. Be who you are regardless of your faults and failures. There are some people I don’t get along with. I can be impetuous and quick to speak without thinking through the consequences, but I am also quick to apologize and know my shortcomings. Many people can build a wide and shallow network but it will collapse like a house of cards if the roots are not deep and genuine.
2. Be purposeful
Build relationships that can be symbiotic. This isn’t done to meet selfish needs but it is done with thoughtful intention. As a Washington wine blogger, I knew that I needed the bigger community of established bloggers. I intentionally sought out and connected with people like Washington Wine Report, Seattle Wine Gal, Paul Gregutt, Wild Walla Walla Wine Woman and more. These relationships became mutually beneficial and even spawned some great friendships.
Knowing that social media marketing and developing a brand required a broader reach, I intentionally connected with local influencers like Pam Scott, Visit Spokane, Ally Shoshana, Monte Tareski, Barb Chamberlain (and so many others) along with the growing local traditional media population on Twitter (enter the radio and TV contacts). Be purposeful about the connections you make whether it is media, non-profits, industry alliances, or popular influencers.
I would speculate that at least 90% of my great “offline” relationships began through “online” purposeful connections.
3. Be giving
Some people are consumers and users. By their very nature their endeavors dry up because at their core they are taking more than they are giving and eventually there is nothing left to take. I love what I do. I love Spokane and the wine scene here. While I have been intentional about most everything I’ve done, I also love seeing the success of those around me and promoting our area. From day one when 5 people watched a video and 3 people read a blog post, it was about adding value to the community. A good friend recently reminded me that it was this “giving” that was so attractive at the beginning. As a business owner with bills, new stresses and responsibilities, I have to admit that I briefly lost sight of giving and became inwardly focused. People often ask if a wine bar around the corner is our competition. I always respond with, “No, I love that place. I often go there when I’m not working.” I love promoting them and their events. Regardless of whether there is a direct financial return, giving should be at the core of what you do. I’ve recently learned that there is a basic principle of the universe. Where your attention goes, your energy flows. Living life with open hands to give also allows you to receive back as well. Many of the most valuable relationships I have were birthed out of giving relationships with the Spokane Symphony, American Childhood Cancer Organization INW, Make a Wish foundation, Cancer Patient Care, Cystic Fibrosis and more.
Relationships are the key to success in any endeavor. Relationship marketing is the unique combination of building and nurturing relationships both online through social media and offline through traditional means. In my opinion, relationships grow through selfless effort and sacrificing your own needs for the greater good of others. Be genuine as you intentionally and purposefully build relationships with key people. Look for ways you can give back to each of those relationships and success will be yours.
For those of you who are interested, I’ve included both the TV and radio spots here for you