Posts Tagged ‘marketing’
The 7 Deadly Sins of “Deals of the Day” for Advertisers to Consider
“Who wins from these coupons and at what cost?” That is a crucial and often overlooked question for businesses rushing to join the emerging “deals of the day” bandwagon being driven at breakneck speed by hundreds of companies across the US. Unquestionably, these arrangements drive short term spikes in business, but closer inspection reveals all is not what it may seem.
Here are seven (7) personal observations I have developed over the past year, having worked with small to medium sized businesses every day. These companies range from $500k to just under $10M a year in revenue and are always setting aside part of their budget to try new advertising ideas.
The 7 Potential Deadly Sins are:
1. Businesses are still paying for it. The average discount after a campaign (after adding in up-sell, cross-sell) is larger than normal. It lowers their overall margins.
2. They own the data. Daily-deal companies typically keep the consumers data and don’t share it with the advertisers. Unless there have an efficient way to capture the consumer data when the certificate is used – businesses lose.
3. Think it will bring “loyal” customers? Forget it! Double-check the research. Recent studies conclude the national average for repeat customers from campaigns such as these is less than 20%.
4. Is the business prepared not to blow all those new 1st impressions? They should expect an abnormal demand for their products and services in a short period of time. Unless the first impression is great, the business can develop a bad rap fast.
5. What about current customers? They could be casualties. They are the ones that have been loyal, and as they say, “brought you to the dance.” Unless they are receiving the same love and attention during this heightened demand – watch out!
6. Breakage – potential liability issues! “Breakage” is the term many use when a business can’t fulfill a promised coupon offer where a customer has paid for it in advance. Many government authorities are investigating complaints from consumers that can’t use the coupons. Businesses could end up holding the tab for all “unused” offers or have to put money into escrow.
7. A company’s image and BRAND could be at risk! These campaigns can be very effective for new locations or brand new businesses with hardly any customers. BUT, if the business has an established brand – beware – consumers are smart and they may sit on the sidelines until that ridiculously great teaser offer comes along again. These campaigns have also been used as “ATM Machines” for businesses that have struggled during the financial downturn, but in the long run overall profit margins can be severely compromised.
The top tier companies that promote these offers have a great business model and many investors can’t wait to become their shareholders. But in the long run do they have the “middleman” or their advertisers’ best interests at heart?
STAY TUNED. There is more to come! Every few weeks I will post more granular details and ideas about each of the topics in this edition. I hope you find this useful and share your comments and stories.
Derek Hall is an entrepreneur and founder of DartzDeals based in Austin, TX. He also has over 21 years of experience in executive management in the technology industry. He has founded several very successful companies since 2005 to serve the advertising needs of local business owners. DartzDeals business model is based upon persistent advertising via smart phones, the web, personal branded apps and high end print for local businesses to use for client capture and retention. DartzDeals website is www.dartzdeals.com.
So you’ve decided to use a coupon to promote your business (Hopefully on DartzDeals…but hey, we know you have options). Now what?
Coupons are great for promoting your business to new customers who, otherwise, may have never visited your business. They are also great to thank your loyal customers for their business. But one of the most overlooked benefits of coupons is the opportunity to gather information.
Information can help you track who your new and existing customers are, where they live, what they enjoy/dislike and what the word around town is about your business. You can also ask permission to contact them about future promotions and start building a database of customers.
An idea: ask your customers to fill out a short survey when they use your coupon. As a reward for filling out the survey, offer them another coupon to encourage repeat business.
Keep your surveys short. Customers should be able to fill them out in one minute or less.
Here are some examples of questions a restaurant (We’ll call it Dartz Diner) may ask it’s customers:
What is your name? Email? Zip Code?
How did you learn about Dartz Diner?
Is this your first time dining at Dartz Diner?
How would you rate your experience at Dartz Diner?
What did you like or dislike about the service, food and decor?
Will you be a returning diner?
These are just some examples of questions you can ask your customers. For Yes or No questions allow guests to circle their choice rather than writing it in, they will appreciate the seconds of time saved.
Have someone reliable and accurate enter the information into a database. Even a program like Excel will work to store data and track patterns.
Coupons are a great way to get measurable results, but if you want these results to last you need to know your customers and their needs. You need to have a conversation with your customers.
Daily Deal sites don’t provide you any information about your customers. What good is that? DartzDeals can provide business’s with basic demographic information about their customers such as name, email, zip code, gender and what categories they are interested in.
Halloween is fast approaching, but maybe you don’t want to spend all that money on a costume right before the holiday season. What to do? Make your own costume.
We’re still trying to decide what Dart should be for Halloween (suggestions would be lovely), but we did find some great places to start building your outfit….
Goodwill: This time of year Goodwill brings out all their Halloween costumes they’ve been holding from the past year. If you see one you like, go ahead and grab it because you won’t find a better deal anywhere else. Goodwill also has great pieces that can serve as the base for your outfit. Going as a zombie? You won’t mind getting these clothes a little dirty with makeup and fake blood.
Hobby Lobby: Go here for great deals on fake plants (Eve, Hippie, Swamp Thing), hot glue guns, glitter, clothing paint, beads and makeup
The toy store: Go here for costumey brightly colored makeup and accesories like swords, baseball bats, wands, etc.
Home Depot, Loews, or (our pick) your locally owned hardware store: Now don’t hurt yourself, but there is room to get a little creative with the knick knacks you can find there. Want to be a construction worker? There’s no better place to go.
Need some inspiration? Check out this compilation of DIY videos on YouTube:
So what should Dart be for Halloween? A chicken? Lindsay Lohan? ideas please!
It may come as a surprise but according to the 2010 Digital Consumer Portrait done by Insight Express, males ages 25-34 are using their phones the most to shop and look for deals.
Not only are males using their phones more to shop, they over-index in coupon usage in the following types of stores:
Electronics store – 30 percent (general population 10 percent)
Clothing store – 33 percent (general pop. 15 percent)
Department store – 30 percent (general pop. 15 percent)
Service location – 16 percent (general pop. 7 percent)
The study also said that men prefer to find coupons themselves via an application: 51% of men vs. 28% of the general population.
What does this mean for your business? Smartphone technology makes shopping even easier by putting information at your fingertips. Not only do 53% of men own smartphones, they are using them to make their shopping easier and faster by downloading applications and browsing for reviews. With mobile shopping still rapidly developing, we expect to see the segment grow along with it.
What entices a consumer to redeem your coupon? A good money saving incentive is certainly a huge part of the equation, but often it isn’t enough. At DartzDeals we have the expertise to help your business exceed expectations with a coupon campaign.
Here’s a list of some Dos and Don’ts when creating and posting your coupons. Want to learn more? Contact us (866) 358-3325.
1.Expiration Date: Be upfront and clear about how long the offer is good for. We suggest a coupon be good for at least one month, but ideally three months to give people plenty of time to find and redeem coupons.
2. Clear and Concise: No need for paragraphs. People like their information quick and easy to understand. Your company name and logo, contact information, a quick description, any “fine print” (see the don’ts for this), and of course, the offer are all musts to put on your coupon. DartzDeals will advise you on the best way to display your coupons to appeal to consumers.
3. Promote: Take advantage of social media, email lists and paid advertising to promote your coupon. This will increase traffic and make your efforts worthwhile.
4. Research: Many companies overlook the importance of tracking their coupons beyond how many people redeem the coupon. Who are the people using the coupon? Where do they live? How do they use the coupon? Coupons are a great way to find untapped markets and new ways to enrich your business.
1. Tons of Fine Print: You want your customers to be able to use your coupon most of the time. If consumers feel that they cannot use your coupon or, worse, they try to use it and are not successful the efforts of your coupon may backfire.
2. Use Lots of Colors: Simple is best. Using lots of colors distracts the consumer from your coupon’s content and they may skip over it entirely. Stick to two or three colors that are consistent with your logo.
3. Skip the Math: Do the math to make sure your coupon will be profitable over the entire life of the coupon. The last thing you want to do is discontinue the coupon because of lost profits. Doing the math will ensure happy customers and a profitable campaign.
It seems like there is a new article every week on how to save money at the grocery store and most of them say the same thing: Make a list, Eat before you shop, Bring coupons (DartzDeals loves this one ), and Look out for store specials.
While these are all great ways to save, I ran across this article that gives you a few more options you might not have thought of. Some ideas I like are:
1. Skip the processed food (fresh is always better for you and your pocket)
2. Skip the precuts and grate it yourself. This will save you money and not take a lot of time out of your day. Get the family involved in preparing food and enjoy the extra quality time together.
3. No toiletries. If you can, make a separate list and buy these items at discount stores where they are 20-40% less.
4. Eat more beans! They are inexpensive and are powerhouses of nutrition.
The article suggests freezing milk as a way to save. I’ve never done it, but if you do tell us how it goes. And remember, use the first inch or two of the milk to avoid a messy explosion when it expands.
*A tip of my own (as a college student who refuses to eat Ramen): Shop more often. I used to shop for the next 3 weeks or so, but I kept throwing away unused produce and other perishables. I started shopping every week and enjoyed eating fresher food and savings of about $50 a month.
Below is the full article with all 20 tips: