Local deals. Daily deals. Group-buying deals. Call them what you will, but they're all the same thing: a very expensive form of marketing that can run a small business into the ground if utilized incorrectly.

They all have the same premise: the client company agrees to offer its products or services at a heavily discounted price. The local deals firm then distributes the deal to all its subscribers near that company's location and takes a large cut of the profits (usually 50%).

That leaves businesses having to provide their goods at a very low cost, usually at a loss. For instance, a restaurant that offers a two-course meal for two at $20 will (in most cases) have to provide that for $10.

The reason so many companies are choosing to jump on the local deals bandwagon is the promise that their offers or deals will result in an influx of loyal, repeat customers.

Yet that is rarely true. Daily deals attract a certain type of consumer—the type who never wants to pay full price. Unless you take steps to draw them back, the day those consumers redeem your deal will be the last you see of them.

Other marketing channels that have taken off recently, such as social media, are based on building relationships and retaining customers. A good social media agency can work wonders for your business, using a process that is slow yet steady in achieving success.

However, Groupon and friends are about instant marketing. But instant marketing is marketing that is forgotten quickly—unless you take steps to make it work long-term, that is.

So what can you do to make your deal work?

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ABOUT THE AUTHOR
image of Amy Fowler
Amy Fowler is an online marketing executive at Boom Online Marketing, a UK-based online marketing company and social media agency that offers services including pay-per-click management and conversion-rate optimization.