Archive for March, 2012

Coupons, Groupons, LivingSocial, Plumdistrict, etc… Navigating Deal Sites

Posted in Uncategorized on March 19, 2012 by smweber

Like most folks, I have been watching deal sites – the Groupons, LivingSocials of the world – and seeing what kind of impact they will have on marketing.  Is it right for you?  Well, that depends on your business.  A few things to consider when thinking of running on a deal site:

  • Your offer has to be compelling. In order to work well your offer has to be compelling.  Yes, this seems like a no brainer, but I worked with one person who insisted on doing a card offer with a coupon site during September and guess what happened?  Nobody bought it.  Okay, three people purchased it…   If your goal is to get more customers, three probably isn’t too successful for you.  J
  • You have to be able to give what you offer. One client I worked with is in a service business.  It is the owner and three other folks.  Sure, you can create a deal, but is it reasonable to expect that three of you can fulfill 400 of these orders?  Not really.  Sure, you can limit it, but the deal sites goal is to make money, and if you limit the number of items they can sell they become less interested.
  • You have to make money long term. Sure, maybe you will break even on this one offer… or even lose a little money… but will these people come back?  Can you upsell them when they come and redeem the offer?  What are you going to do to make sure that these people come back to order with you? How can you drive loyalty?  How can you increase their spend when they redeem their offer?
  • Is the target too broad?  Sure, deal sites are great for getting the word out, but are your loyal customers focused in a close proximity to you?  If so, maybe a great offer in the local paper will do the trick.

There are also some tips/hints

  • Negotiate their fees. Coupon sites first offer to your business will always be “you pay us 50% and we’ll give you 50% of whatever people purchase”.  Did you know that is negotiable?  You can get up to 70% (and they take 30%) with some negotiation (it depends on the size of your offer, etc).  You can get lower… but it is tough.
  • Negotiate the offer.  Deal sites will often tell you to make your offer very rich… but it may not be right for your business.  Run your numbers.  Know your business.  Does it make sense?  These are just suggestions – so feel free to negotiate the offer.   But, remember, they want to make money too.  So, if you negotiate too much in your favor, your ad may never run…
  • Even if you signed, your deal may never run.  There are sales folks and then there are the people that make the decisions on who runs.  You can sign a deal, but the deal may not run.
  • Not everyone will redeem the offer.  Keep in mind when you run your offer only about 80% will redeem.  (80/20 rule comes out here too).  The 20% that don’t?  You get to keep that money.  Remember that when you run your numbers.  Of course, 100% could redeem… so keep that in mind as well…


Deal sites can be great for some businesses… but just be careful and make sure it is something that is profitable, worthwhile for your business and something you can fulfill.  Run the numbers to make sure you make an educated estimate on how it will grow your business.  I have seen some businesses flourish on deal sites and others that just walk away.  It all depends on your business and it’s goals.

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