Do Daily Deal Sites Work for Small Businesses?

I get a lot of questions from small business owners regarding daily deal sites – they want to know if it’s worth the time and investment to work with Groupon, Living Social or one of the many other similar sites. So today I wanted to break down the good, the bad, and the ugly of daily deal sites.

The Good. The good news is daily deal sites are a great way to get exposure for your business to thousands of consumers in a local area that may not have heard about your brand.

The Bad. The bad news is that most of these people are just looking for a deal and are typically not very loyal. For example, if you’re a massage therapist you may only be reaching those people that jump around to various massage therapists just to grab that $39 massage but don’t intend to actually turn into a long term client. Secondly, you don’t make any money off of these daily deals. You actually lose money. So one thing you really need to ask yourself is whether it’s worth offering this huge discount to a large amount of people when only 1 or 2 percent will turn around to become repeat clients.

The Ugly. Most daily deal sites don’t really care about you or your business. These companies are simply looking to see how much revenue they can bring in. Their only focus is putting the best deal out there in the largest quantity and this is not good for you – in some cases it’s even caused some small businesses to go under.

So today I want to share with you my personal opinion on how you can run your own daily deal. You can target consumers that love, like and trust your brand and will continue to come back. Watch the video for my tips on running your own daily deal:

Keep in mind that not all Daily Deal sites are created equal. I have had clients that have launched successful daily deals by using smaller companies with higher end clientale like RuLala and Bloomspot. The best thing is to do your own research and never made the price of the deal less than cost.

PLEASE SHARE – Have you worked with any daily deal sites and how did it go for you? Do you have any other questions or comments on the daily deals subject? I’d love to hear! Share with me in the comments below.


Comments

6 responses to “Do Daily Deal Sites Work for Small Businesses?”

  1. Amy Yamada Avatar
    Amy Yamada

    Great content! Thanks, Devani Freeman! 🙂

    1. You bet! Thanks for stopping by 🙂

  2. Hey Devani, good idea to share this info if someone is on the fence!

    For my business it is good and bad. For my services where I need to be present (like my personal chef services, cooking classes, etc.) they are okay, I don't make much money off of them, if any at all, but it helps me reach a new clientele that may have never heard of me and want to give it a try. That gives me the opportunity to get into their homes, get to know them and knock their socks off with my meals and my customer service. 🙂 The downside to this is, as recently happened, someone that purchased their voucher didn't contact me before the expiration and they are upset, although I offered to give full value of what they paid, which I am obligated to do, PLUS an additional discount. The purpose of us giving these dates is because as a vendor we have to plan for the extra business and as for my case I planned it to expire (while still giving months for the purchasers to redeem at their convenience) before I had some big time consuming contracts coming up and wouldn't have time to fulfill them after that date. Anyway, the person is still not very happy and that makes me very uncomfortable as I strive for 100% satisfaction. So while I normally get to feel out my potential customers with in-depth consultations to avoid having to deal with situations like this, with the daily deals anyone can purchase and you may end up with a client that you normally may not have felt comfortable servicing, or just being unhappy with your service without even getting the opportunity to try it and are left with a bad taste in their mouth.

    On the plus side of this is for a business such as Menus by Mesa de Vida, my weekly healthy menu planning membership, these deals have been great. I already do all of the work every week, I just have to add the new members as they come in. Yes it is a discount but I don't lose any money and end up reaching tons of people that may not have heard about the plan. Then, again, I get to knock their socks off with the membership, they get to try it out for a big discount and I get a high rate of people signing up at the end of their discounted membership.

    Lots of positives and negatives! I'm sure it is different with every service. Great topic!

    1. Thanks for sharing Kirsten! Good tips for other to know and be aware of! Just remember you can’t make everyone happy, just continue doing what you’re doing because you are rocking!

  3. John Elder Avatar
    John Elder

    Thanks for the information Devani. I never thought of it that way, although I never try to give a discount so low that I lose money. I did sign up for one of those “daily deal” companies once but no one ever called me. I have found a way to bring in cash on the internet which is a blessing now since my main business is slowing down. Great to hear from you.
    John

    1. You bet John. Glad to hear your doing good!

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Devani Freeman