Update Perspectives on Daily Deals

Major players, like GroupOn and LivingSocial. Smaller players, like DailyDeal and Woot. Giants ready to descend, like Facebook and Google. Countless newspapers looking to reverse sinking advertising revenue.
     It’s social couponing, that promotion tactic in which a substantial discount is offered to people who are told the offer is activated only when a certain number of others sign up for it. Generally, a new deal is featured each day.
     Findings from an April 2011 survey conducted by Lightspeed Research lead me to update my shopper psychology recommendations to you about daily deals.
     In my opinion, the Lightspeed respondent sample of 3,300 consumers was not fully representative of the entire target population for daily deals. Still, Lightspeed is very careful to ensure the accuracy of the data they collect. I recommend you consider the percentages below as good approximations:

• Set the terms to encourage additional expenditures. About 60% of those who used a daily deal spent more than what was covered by the discount ceiling.
• Tempt repeat business. Only six months ago, many retailing consultants were warning that social couponing attracted only bargain hunters, who would quickly jump to another merchant as soon as you charged your regular prices. But 65% of the Lightspeed respondents who took a daily deal said they returned later to the retailer. Give each purchaser of the daily deal a coupon for a smaller discount on a subsequent visit by a deadline date that fits the nature of your business’s offerings. Notice I said purchaser, not user, of the daily deal. About 23% of the Lightspeed daily deal purchasers said they had failed to use the discount before the expiration date. It’s nice that you’ve use of their money without needing to provide a product or service. But you want to avoid bad feelings associated with your store. A small sale following a large sale helps accomplish that.
• Recognize that, for now, the majority of your customers and potential customers aren’t using daily deals. About 75% of the Lighthouse panel said they have not purchased a daily deal during the past year. Be sure your services to your current customers aren’t compromised by services to the coupon customers. Tell your current customers about the coupon offer and encourage them to enroll online for their next visit. Have sufficient staff during the time of the offer, which often means increasing your staffing.

Click below for more:
Fine-Tune Your Social Couponing
Guard Your Promotions Against Being Gamed
Keep Discount Conditions Strict Enough
Follow a Big Sales Event with a Smaller One