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Four Ways to Make Local Deals Work

by Amy Fowler  |  
December 22, 2011

In this article, you'll learn...

  • Four ways to maximize the benefits of your daily deals promotions
  • How daily deals can hurt your bottom line

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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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.

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  • by Michael Bowers Tue Dec 27, 2011 via web

    Great post. I work with small businesses all the time and many are stuck in the "instant marketing" mode which is exactly what these daily deal sites want. The small business to often doesn't realize that they have to do work to attempt to retain the customers and break even on the daily deal. I like the ideas about using the daily deal offer to increase the social media activity and build the business' database.

  • by Jack S. Tue Dec 27, 2011 via web

    Great article. We ( often thought about integrating these groupon or daily deals as a promotion but not sure what is the best way or even if there is a market for this type of concept for our business. What kind of product do you think should be used?

  • by Cathy Burrell Wed Jan 4, 2012 via web

    In November 2011 I was asked to participate in a panel discussion on this very topic, through the Women's Enterprise centre. We had a pro and a con discussion, and as with most things you really have to be sure that group buying is right for your business. you can visit my fb page for a link to the podcast: Cavern Retail Consulting. Thanks for posting this. Bob Phibbs has written on this topic as well...

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