When times are good and the ship of state only needs to sail straight, mentally healthy people function well as political leaders. But in times of crisis and tumult, those who are mentally abnormal, even ill, become the greatest leaders. We might call this the Inverse Law of Sanity.
Comparing daily deal site characteristics revealed several common success factors, the first one being: we love food…nom nom nom. But seriously, these sites are successful because they have unearthed and are feeding into new customer expectations and desires.
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What makes daily deal sites successful?
Every site provides deals that are specific to the customer’s location, interests and lifestyle, and they all provide customers the ability to share their purchases through social elements. This means personalization is now a customer expectation and that the future is no longer going to be about social networks, but about social elements within products and experiences.
Additionally, 50 percent off is the customer’s benchmark for “value,” which can be lowered by providing the freedom to be spontaneous. Groupon and LivingSocial, the top players in the daily deal space, offer mobile apps and day-of coupons, which eliminate the need for their customers to plan out their activities just to redeem their coupon. These features allow customers to use coupons “on the fly” and feed into their growing desire for instant gratification.
The most important thing for merchants to remember is: daily deals are promotional tactics, and every successful promotion requires a significant amount of research and negotiation behind it.
1. Know your customer base.
Aside from being able to evaluate the overlap between your customer base and the site’s customer base, having a deep understanding of your customers will help determine what percentage off and referral incentive types are appropriate. These are two key considerations that will whittle down which sites should be of consideration.
2. Focus on one goal.
Attempting to boost sales, increase awareness and garner first-time buyers, all at the same time, is a lofty goal. Keep in mind that one daily deal is just one promotional tactic. Sales boosts are best fit for merchants with a significantly-sized loyal customer base. However, too deep of a discount may re-price these customers, lowering their willingness to pay regular price. Less established, newer merchants may consider taking the other route: running a deep discount to reduce hesitation within prospect customers, converting them into first-time buyers.
3. Consider it a trade.
Most merchants run a daily deal with the expectation of making immediate profit off of it. This is not always the case. Depending on the deal and your target audience, you may make profit, you may not, or you may only break even. The best way to look at daily deals is to see it as putting a portion of your promotional dollars into deal sites, rather than fliers, direct mail, etc.