One of the toughest parts of seeing success in a new market is to prove that demand, and the actual market, exists. Many times, market need does not always translate into market demand.
Many companies run market surveys and use official demographic data to evaluate the potential of a new market, but still fail. The data showed not enough demand to permit market penetration, or it looked promising, but when approached, sales were disappointing.
An interesting component of the daily deal industry is that the barrier to entry is very low and deal software companies like ours enable folks to create and launch a smaller, niche-specific or geo-specific daily deal site without any financing or outside investment.
In fact, I’ve spoken or emailed hundreds of daily deal website owners who turn a profit and didn’t take on rounds of financing, and didn’t spend millions of dollars to get set up, and don’t even have to worry about servers and hosting and a large staff. They therefore have a real business with no debt, little overhead, and pretty good returns.
Many of these folks skipped the whole “market research” section all together and with a bit of luck were able to make it work.
The daily deal industry is a different ballgame than a typical ecommerce store because it relies on other merchants to provide deals and discounts to their products and services. Even still, with the wide array of information offered on sites such as Daily Deal Media, many daily deal websites put themselves in a situation where they can’t cover expenses and run the business efficiently, thus resulting in them shutting down.
Properly collecting and analyzing useful data in the daily deal industry will only further help your venture see success. And as the competition of smaller, niche-specific as well as geo-specific daily deal sites grows in this industry, the importance of tracking, analyzing, and learning from data further increases.
I asked Tim Elliott, Co-Founder of Savvr.com if he felt that websites that track their own data as well as analyze other data from their industry are benefited, and if yes, how so?
“Absolutely. The daily deal industry is not only art, but science as well. Your ability to compare your own deal data against competition is critical. Intelligence software like Savvr Real Time Data allows you to identify the most competitive offers, categories and timing from a national and more specifically, local market perspective. That competitive intelligence is extremely valuable when sourcing deals, merchandising the site and planning your deal calendar.” – Tim Elliott.
Know and track your own data analytics.
Tracking and monitoring your conversion rates on your website is the first step to take. How many people sign-up & join your website versus just leave? What’s the ratio of folks who see an offer on your site and order a coupon from you?
You can use free tools to track and analyze this information such as Google’s Optimizer and Analytics programs and tracking this data is pretty important as there is no way to know if site updates actually improve anything unless you are tracking data.
Knowing these conversion rates can help you understand what types of offers or categories sell the best for you and also help you split test variations to help increase optin and sales conversion rates.
Know the rate at which you are able to convince and close merchants to offer a deal on your website. Knowing and tracking this rate helps you work to update your “elevator pitch” and increase the rate.
When someone asks what my opinion is on the look / feel of a website – I give them just that…an opinion. The real answer to the question comes in the form of another question…
“Have you split tested this version against another version?
Know and analyze data from your industry and competitors.
Knowing and understanding your own companies’ analytics and data is just one part of the spectrum. It is equally, if not more important to also understand and analyze industry as well as your competition’s data.
Knowing that the daily deal industries top-selling categories consist of the below is solid information to know as a daily deal website owner:
Beauty / spas
Arts & entertainment
Health & fitness
Food & drink
Further analyzing revenue numbers can help you ensure you are getting the most bang for your buck. As with everything in business, if you have no earthly idea what you are doing when it comes to tracking and analyzing data – you may want to outsource, crowdsource, or insource the activity to someone who does.