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 owner’s perspective, what’s 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” 12/3/12–12/9/12, pp. 53–54):

“82% of small business owners surveyed haven’t or won’t 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.  Let’s face it—although 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 don’t see how the daily deals emphasize relationship.

Third, just because you throw part of your business into social media doesn’t 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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About James Meadows

Currently I serve as a training team manager for Tyco Integrated Security at a customer-care center in Kansas City. Additionally, I am a business consultant, a freelance corporate writer, an Assembly of God ordained minister, a Civil Air Patrol chaplain, and a blogger. I believe we are living in the most fascinating times of human history. To maximize the opportunities these times present, I have a passionate interest in leadership development and organizational success, both of which I view as inextricably linked.

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