You are open for business. And that's exciting! After so much work, your dream of operating your very own small business is now a reality! Of course, you are looking for ways to spread the word about your business. One popular option for growing a small business is to look at some of the very popular daily deal networks. These networks include Groupon, LivingSocial, and many more.
If you've heard of these sites, you may know that they are companies that specialize in working with businesses to provide discounts to customers. Businesses gain access to a large network of potential customers, and in turn customers get a variety of discounted deals to take advantage of. This is an easy and affordable way to get your company name out on the market. However, small business operators should take caution when entering into agreements with these discount sites. Selling discounted product through a third-party discount service means you need to share your already-discounted revenue with the discount broker. This blog post reviews the pros and cons of utilizing a daily discount website to attract customers.
Pros of Daily Deal Sites
Sites like Groupon are very well-known and popular. With 48.3 million users reported in the beginning of 2017, Groupon offers access to a huge customer base with undeniable value. Its competitors control a smaller-but-growing portion of the discount deals site market.
This means that making a deal with one of these sites will give your business that much needed exposure. And, the better the deal, the more attractive you will be to the potential millions of users who could see your business. Any of these discount networks will, without a doubt, bring your business some degree of exposure.
If your margins are large enough to allow it, you may even be able to make a profit on your discounted transactions made through these third-party sites. Keep in mind the customer will be paying less, and the discount site will be deducting its own cut. Before you make a deal, see if you can set a price that will allow you to turn a small profit after all the deductions and still provide the customer with an attractive deal. If you can do this, it's a win-win. You'll draw customers and produce a sustaining revenue.
However, the chances are that making a deal for a discount service will not yield profitable revenues. Just breaking even may be a best-case scenario. However, you stand to gain a lot of new customers in the process. Customers that may come back to your establishment later and even bring their friends and family with them.
Cons of Daily Deal Sites
If you do your calculations, you'll probably figure out that you're going to have to take a loss if you want to offer discounts great enough to compete with other businesses that appear on these discount sites. Perhaps the cost-per-sale is worth it. After all, any manner of marketing will cost money. You may still be able to justify the cost, as there is intrinsic marketing value to bringing customers through your door.
Keep in mind, however, that many users of these discount networks are so-called "penny-pinchers." Business operators are known to complain about the penny-pinching one-time customers that these daily deal sites bring to their establishment. Ultimately, while deal site may bring more customers in through your door and expose your brand, you need to consider the quality of said customers. Perhaps other marketing techniques would attract a more generous clientele.
Using discount sites is an accessible option for getting your business and brand some exposure in the modern world of digital marketing. However, the quality of customers is extremely vital and should be taken into consideration. Remember, the endeavors with daily deal sites are successful if and only if a customer comes back and buys your product (or service) at full cost.