Here’s the thing about daily deal promotions. They rarely work as a standalone offering. At best, these loss leaders bring people to your business who might not otherwise know of your operation and/or are price sensitive, opting to give you a try since they wouldn’t normally buy, for example, cupcakes that cost $20.00 per half dozen!
Perhaps I should clarify what I mean about “rarely work as a standalone”. In terms of return on investment, any business owner usually wants the biggest bang for his/her advertising dollar. Since most daily deals are so drastically discounted, chances are the business does not make great margins, if any, on that particular unit of sale.
Relying on a one-time price drop to lure customers into your establishment does not equate to customer loyalty; where the real value lies with most any promotion. Long-term, repeat customers create increased revenues and steady revenue streams. Converting a one-time price-reduced sale into repeat business at retail prices not only subsidizes the loss on the initial sale but drives future higher margin sales. Makes sense right? But here’s the less obvious part for many...
The service received (and more importantly perceived) will heavily influence whether that loss leader consumer can be converted into a retail price-paying customer. The work doesn’t stop when the consumer clicks the “buy now” button and prints off the certificate. It’s only just begun if you are serious about “daily deal one-timer to loyal customer” conversion.
Top 5 Things to make sure your business gets the best value from your Daily Deal-type participation:
1. Information – Is all the really important information clearly displayed on the coupon? Or is it hidden in the sized-4 font at the bottom? I’ve had a consumer complain to me about a series of charges later piled onto her coupon that more than doubled the price. The company got the consumer once but she’ll never be back. Waste of a promotion. Consumers don’t like those kinds of surprises.
2. Does the deal make sense to the consumer? It is reasonably restrictive or impossible to redeem kind of restrictive? Nothing frustrates consumers more than when businesses make it so difficult to use a promotion they need some kind of calculus formula to untangle it. Anyone try to book two Aeroplan seats recently? Ahem.
3. Frontline Service Personnel – Are they as excited and onboard with the promotion as your customer is? Do they welcome the new customer and make them feel great about redeeming the coupon? Snobbery experienced when redeeming discount coupons can leave newbie customers with a bad first impression of your business.
4. Does the promotional coupon accurately represent the good or service you’ve advertised? You promised something that retailed for $100 and with the coupon only costs $20 ---- but when the customer makes the purchase, is it REALLY perceived as worth the $100 or an abbreviated version of your typical product or service? A successful promotion strives to plunge the consumer deep into your value proposition so they see how much they want to continue using or experiencing what you sell. Abbreviate and it likely comes across as not so spectacular.
5. FOLLOW UP. What a great opportunity to start relationship marketing with your new customers. They’ve tried your product or service at a discount. Now reconnect with them to see if they have any questions about the product or service, let them know about other specials or features you have in your product/service line. If you have true service professionals working for you, they have already started building the relationship in the earlier parts of this process. Make it more difficult for your new customer to be lured away to the competitor by another discount coupon coming down the line.
I see the value in discount coupons but I see a far greater opportunity often missed out by businesses failing to capitalize on the service aspect surrounding these types of promotions. Focus on these areas and chances are you’ll gain a far greater return on your investment. Service professionalism starts even before the daily deal reaches your new customer’s inbox and well after the first purchase is made. Be honest uild the relationship, ensure their perception of the experience exceeds their expectations and follow up.
Service Essentials Customer Service Workshops take participants through the Consumer Purchase Cycle and discuss how service professionals can help facilitate sales at every stage of the cycle.