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May 25 2012


Daily deals

Daily deals

Over the last year or two the 'daily deals' phenomenon has gone from to strength to strength and for there doesn't appear to be a finish in sight to the booming business.

Most people are by now familiar with the idea of daily deals however for the ones that aren't, here's a snapshot;

All Daily Deals One Place

The daily deals / deal of the day website everyday promotes an offer offering large discounts on things like restaurant meals, spa's, beauty treatments through to sky diving and holidays. The sale typically gets activated each time a quantity of customers sign up for the daily deal, this 'deal tipping' concept is named group buying and means that by ensuring a top amount of customers the business enterprise will offer the big discounts.

From your business perspective the concept also works well. Businesses need customers and are often needed to spend massive amounts of money out of their marketing budget on attracting those customers. A 'daily deal' can be quite a great solution for cost effective marketing since the business doesn't actually need to spend anything. Instead they work with the daily deals company to make a deal / offer which can be emailed to the daily deals database of shoppers. These customers then register the daily deal finding a substantial discount around the regular services with the business.

The business enterprise gets free promotion to all from the daily deal websites client base which could regarding some of the deals sites be around 100,000 people or more (national exposure deals get delivered to a lot more). Some of these then buy and be customers with the business then hopefully benefit from the experience and return as a a high price buying customer or tell their friends concerning the great experience.

As an example 'Sensational Sushi Restaurant' in Surry Hills desires to generate new customers for their restaurant, they use the deals site and decide on the following deal, 60% discount on the 2 course meal plus a wine bottle. This deal is sent to all with the deal websites client base in Sydney's Inner West, 150 use, then on the next Half a year (with respect to the timeframe the deal is done for) they redeem their deal in the restaurant.

In the customers perspective, they get a great

This group buying business model was made by Groupon in the US in November 2008, they currently have daily deals websites around the globe and are estimated to be worth between 15-25 Billion USD.

Despite these staggering numbers there are many people who feel that the deal-of-the-day style model that Groupon created starts to exhibit cracks. The growing quantity of deals sites, competition within the industry and sheer sum of money being made has triggered some sites over selling the deals, over whelming nokia's with far more customers compared to what they can comfortably handle.

All Daily Deals

This over selling of deals has resulted in absolutely free themes the inability book their activity as an example the meal on the restaurant for weeks or months, when they finally do find a way to make a reservation they're then treated as second class citizens because they are presenting the deals voucher. The complete experience can be off putting and contributes to the shoppers never returning but in addition telling their friends and relatives which further damages the business.

Don't be the product, buy the product!