Companies like Groupon and LivingSocial think they have us convinced their daily deals really are deals. To some extent that is true, but it depends on whether you are the consumer or the business owner. Generally, for the consumer the deal truly is a deal because of the significant price break provided. From a business owners perspective, whats the score?
The score, as it turns out, is not as good as the business owner would like it to be. Writing in Bloomberg Businessweek, Karen E. Klein provides the stark statistics (Small Businesses See Red Over Daily Deals 12/3/1212/9/12, pp. 5354):
82% of small business owners surveyed havent or wont run a daily deal this year; 11% lost money or had no boost from the deal; 4% got more business but no repeat customers; 3% got more business with repeat customers. (p. 54)
This raises three important points. First, perhaps the very nature of the sizzling daily special simply attracts the wrong sort of customer. Lets face italthough price is always a consideration, it is never the only consideration for the more sophisticated clientele. Maybe the consumers who respond to the daily deals are coming at this from the mindset of fly in, grab the goods, and fly out.
Second, customer loyalty is driven by many factors, not just price. These many factors are all rolled up in this thing called relationship. Relationships are built over time, quality, trust, reputation, and service. I just dont see how the daily deals emphasize relationship.
Third, just because you throw part of your business into social media doesnt guarantee you have the right recipe. Whatever you do as a business owner with social media, it must be the result of a comprehensive advertising and marketing strategy. Otherwise, you are just wasting your resources.
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