Is a daily deal right for your business?
I work with a lot of companies that have run daily deals. Here is a little bit about the good, the bad and the ugly of the daily deal market.
There is a few questions you need to ask yourself before you decide if a daily deal such as Groupon or Living Social or one of the smaller sites. Can your business handle a sudden increase in business? Do you have the staff? Can your business handle the financial loss of a drastic discount?
When selecting the company to run your deal with you may want to look at the size of the company. It may be more beneficial to go with a smaller company at first to look at a smaller amount of sales to see how it all works. Depending on the company many will have different revenue shares and are often negotiable to as low as 30%. You also want to look at the payment arrangement, credit card fees and the amount of tax you will be paying out of your share. Being aware of the total cost of the promotion will prevent any surprises in the long run.
When determining the best deal to run you not only want to look at your profit margins, you also want to look at the number of staff you have available to take on new clients. You will also want to have a product that is easy to have an upsell or additional product sale to increase your revenues when you have them in your place of business.
The best part is you have the potential to get thousands of new customers in a 24 hours period. To many businesses this is the biggest value in running a daily deal. What will make this successful is a strategic plan to keep these customers coming back, checking in, and talking about your business. This will ensure the success of your daily deal campaign in the long run.