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How Can Small Businesses Keep Up With Daily Deal Sites?

Small BusinessIs the end of daily deal sites in the near future? Many predict that although consumers are frantically searching for discounts and opportunities to save money, the era of daily deal sites is soon coming to an end.

The popularity and easy access to smartphones and tablets have influenced retailers to become creative with the way they deliver offers and discounts to new and existing customers. In order to stay on top of the consumer game companies have begun to utilize social media and online deals in order to connect with potential customers.

While larger daily deal sites, such as Groupon and Living Social, continue to receive media scrutiny over their declining company value, small to midsize businesses (SMB) remain challenged with consumer expectations and are looking for new opportunities to connect with customers.

With new ecommerce players such as starting out on the offense, some Wall Street analysts are predicting the end of daily deal sites may be near.

Should Small & Midsize Businesses Play Ball?

Even with the visible fading of larger daily deal sites, there is no disagreeing with the fact that today’s consumers are constantly looking for the next best discount or deal.

According to a recent report from market researcher BIA/Kelsey, annual sales from deals – daily deals, instant deals and flash sales – are expected to eclipse $4 billion by 2015, up from just $873 million in 2010 and a 35 percent annual growth rate.

Despite the predictions of daily deal doom, many businesses are still inclined to put deals through sites such as these to gain more attention and attract new customers. Increasing popularity of online and mobile competition and a consumer that has been breed to scout for deals and purchasing incentives, SMBs have no choice but to develop their marketing strategies to meet consumer expectations and drive new business.

However, daily deals are not always a success for every business that implements them. While one business may attract customers, another might not be as lucky.

For example, recent research from a MobileMarketer article indicates that, on average, daily deals are sustainable for approximately one-third of businesses and there are definitive metrics based on the type of business you own, with the highest success percentages for photographers (75 percent), health and fitness (69.3 percent), retailers (50 percent) and restaurants and bars (44.2 percent).

While less than 50 percent of businesses running their first deal report profitable promotions, 75 percent of those running seven or more deals reported an overall positive ROI.

Size does matter, with research from MobileMarketer indicating that SMBs with annual revenue of less than $400,000 enjoyed a 41 percent retention rate on customers acquired via a daily deal, while those with more revenue retained only 15 percent.

SMBs must consider that consumers are looking for a deal and not develop into dedicated customers. A cost-effective alternative to this is to put mobile strategies into action, such as geo-fencing.

Can Texting Save a Business?

Geo-fencing allows business to put up a “virtual perimeter” around a specific location in order to send deals or offers to a specific demographic.

The idea behind geo-fencing is to target consumers when they are nearby. The promotions are able to get hyper local. For example a store could send out a special on umbrellas to people within a 10-mile radius during a rainstorm, or putting a markdown on aisle 6 when a customer is walking down aisle 3.

Small BusinessAccording to MobileMarketer, consumers are increasingly using their mobile device as a way to shop and search for deals. More than one-third of consumers are more likely to make a purchase from a deal from a local small business.

This is one popular response to “showrooming,” where a shopper comes to a store to see an potential purchase, but then makes the ending purchase online after finding a better price via smartphone.

Daily deals can both drive new business and keep customers coming back, but research, by MobileMarketer, indicates that is only the case one-third of the time.

According to MobileMarketer to truly drive sustained growth, SMBs must focus on marketing strategies and other value-added programs they can combine such as loyalty and reward programs to ensure that any and all acquired customers have an incentive to return.

Rewards should entice customers to come back, not only for a one time deal but to receive a larger deal due to a business’s loyalty program.


Read More:  About Groupon

Read More: About LivingSocial


Source: MobileMarketer

Megan Bildner

Megan is currently the Jr. Editor of the Daily Deal Media and Digital MI sites with Mogul Media. Here, she is responsible for the site's content and publication. Along with these tasks, Megan also engages with the DDM & DMI audience through social pages/groups/tweets. When she is not working on the DDM & DMI sites Megan enjoys tweeting, traveling, snowboarding, hiking, and socializing with her friends. She grew up in Michigan's Clarkston and Lake Orion and loves being on the lake, boating, and wake-boarding. You can follow her @MeganBildner or e-mail her at
DDM Reports
The 2014 Edition of the DDM Daily Deal Publisher Directory is the most comprehensive contact list for daily deal sites, flash retailers, aggregators and individuals operating in the daily deal industry. Each record includes the following: - Company Name - Website - Contact Name - Contact Title - Email - Phone - Address (not all records contain a full mailing address)
The 2013 Media List is a comprehensive database of all major media, bloggers and product/app review websites. If you're looking for PR distribution, this is a great list to begin with. Each record includes: - Contact Name - Publication Name - Website URL - Address - Email - Description
2.7M Consumer Subscribers. This data has been aggregated from a number of websites, which include daily deal sites that have gone out of business. Data includes: - Full Name - Address - Phone Number - Email - Signup Website - IP Address - Date of Signup Data will be delivered via a dropbox link in CSV format.