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Let's Make a Deal on Daily Deals

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In this article, you'll learn...

  • Best-practices for sending daily deals offers to subscribers
  • Examples of daily deals strategies that work (and those that flop)

The popularity of daily deals—emails or mobile notifications that offer a discounted local service or product—shows no signs of abating.

According to BIA/Kelsey, US spending on daily deals, instant deals, and flash sales is expected to hit $2 billion in 2012 and continue to grow to more than $4.2 billion in 2015.

Since Groupon's launch in 2008, many lessons have been learned—by the retailers offering the deals and the consumers purchasing them. As the number of daily deal-style offerings grows, the "dealers" (e.g., Groupon, Living Social) have to tread carefully or they'll risk alienating subscribers, upon whom their entire business model relies.

In the spirit of deal-making, let's look at best-practices for reaching out to your subscriber base. Consider the following five scenarios. Will your email list make a deal, or will your strategies get you zonked?

1. Increased Communications


With Mother's Day right around the corner, I will increase the frequency of my communications to my subscribers in hopes that they'll find the perfect gift among the multiple offers I send!

ZONK!

Though subscribers have explicitly given you permission to communicate with them, they expect those communications to be kept to a minimum. If you're a deal-a-day site, sending more than one offer per day may make subscribers feel as though they're being spammed. And you'll be risking more than your reputation with subscribers.

Subscribers' Internet service providers (ISPs) may start considering your messages junk or spam, and your future campaigns will never reach the inboxes of potential customers.

To make a deal, be careful not to overwhelm your subscribers, and keep an eye on your inbox placement. If you notice a dip in your placement rate with a specific ISP, work with your email service provider on ways to restore your sender reputation.

2. Exclusive Offers

The hottest restaurant in town is ready to offer a 60%-off lunch special... but only 50 coupons are available. Since I know they will sell out in seconds, I'm going to reserve sending the offer to my highest-spending and most-engaged subscribers.

DEAL!

Just because your subscribers are looking for bargains doesn't mean they don't like to feel exclusive. Consider making periodic "privileged" offers for your best and most-engaged subscribers—akin to a loyalty program. Sending a super-special offer every once in a while will keep subscribers interested and coming back for more.

3. Trimming the Fat

I've just received a report of subscribers who purchased only once. Seems a waste to keep spending money sending emails to them... so I'll just delete them from my list.

ZONK!

If a subscriber purchased once, perhaps she simply needs a little enticement to purchase again. Instead of getting rid of her, try to engage her.

A similar segment that should be given special care is the group of prospects who have never purchased, yet periodically engage. Send those prospects an offer with a little something extra (free delivery or a special discount offer). Use your subject line to your advantage: If subscribers are getting a special offer as a way to woo them back, let them know!

4. One Size Fits All?

Wow! A dozen gourmet cupcakes for $12? Who doesn't want that? I'll send that deal to my entire list!

ZONK!

You might love cupcakes, but—and I know this may be hard to believe—not everyone does. In fact, no single deal is so amazing that everyone on your list would want to know about it. The only thing you'll likely grow with a "blast everyone" strategy is your complaint rate, and you'll be more likely to lose subscribers than gain sales.

When you're considering which deals should be sent to which subscribers, data is your best friend. Consumers have habits, and if you use a robust online relationship marketing provider, you should have access to enough data on previous behaviors and transactions to determine which subscribers are "cupcakers" and which are "fitness classers."

The level of analysis possible via email is what makes the channel such a high return on investment (ROI) marketing vehicle.

For example:

  • You can easily determine what your subscribers' interests are by looking at which links they click.
  • You can determine the best time to send your campaigns by observing when subscribers open your messages.
  • You can be more certain that you're sending the right messages to the right audience at the right time by keeping a close eye on transactional and behavioral data.

5. Spreading the Word

My subscribers seem to love our spa service offerings. I bet their friends would, too. I'll display a sharing link prominently in my email.

DEAL!

Many daily deal businesses rely on volume, so if you limit your reach to your subscriber base, you're missing a huge opportunity. You'll gain the ability to make more sales and tap into a pool of potential subscribers by making it easy for subscribers to share your messages. And those subscribers who are frequent "sharers" are, essentially, your ambassadors. They should be identified and rewarded with special offers or premium access for their heightened level of engagement.

In the deal-a-day game, the business that takes home the grand prize is the one that has the most knowledge about its subscribers and the one that caters everything about its outreach to meet those subscribers' needs. A data-driven strategy for delivering highly relevant, targeted communications leads to...

  • Lower unsubscribe and complaint rates
  • Better e-reputation
  • Greater response rates
  • More sales
  • More business opportunities
  • Increased engagement with the best buyers 
     

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Bertrand Van Overschelde is vice-president, North America, for Emailvision, where he is responsible for sales, marketing, service, and general administration in the region.

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Comments

  • by Sagi Katz Wed May 23, 2012 via web

    Interesting post. On point #5 ("Spreading the word"), giving users the option to like, share or comment on interesting deals they encounter from within the email itself can likely spread the word much faster and to a larger audience. Also, specifically in the daily deals segment, giving users up-to-the-second relevant information about the deal itself, such as time left to buy and the number of people who have already purchased, along with allowing users to buy from within the email itself can dramatically increase sales.

  • by Bob Phibbs, the Retail Doc Wed May 23, 2012 via web

    Marketing with coupons is not a smart option, it leads to training customers to look for the deal and only return when it is offered. Don't believe me? Check what's happening to JCP as a result http://www.retaildoc.com/blog/using-coupons-to-market-your-business/

  • by Quentin Aisbett Thu May 24, 2012 via web

    Thanks for the post Bertrand. Unfortunately, so many businesses are still not getting the Daily Deals right. Some of the lost opportunities just make me cringe.

    I posted a similar piece titled 'How to: Leverage your Group Buying campaign' http://www.onqmarketing.com.au/group-buying-marketing-tips/

  • by Bertrand Van Overschelde Tue May 29, 2012 via web

    Bob,
    Agreed that it’s not a good idea to market coupons to everyone all the time. You’re exactly right about how customers can become “trained."

    We generally advocate reserving special promotions and offers as a means to support your marketing programs. With the ability to create targeted online campaigns, retailers can remain competitive and continue to delight, educate and engage customers – from rewarding loyal, frequent customers with the hypothetical dinner deal we shared above to offering discounts to re-engage inactive customers. Coupons and deals are a great incentive, but they should not be the only method for driving people to a retailer’s website or store.

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