At this point, I’m fairly confident that a sales rep for one of the many daily deal sites has knocked on your business’s door and attempted to sell you on the idea to run a flash sale promotion for your business.  If the sales rep wasn’t too pushy and they actually conveyed the information properly, you might be seriously considering running a daily deal promotion or even running another one if you have already done so.

It can be a superb way for you to get new clients, grow additional revenue, get an influx of new customers, and it can provide a myriad of other benefits for your business.  But before simply diving right in and agreeing to terms set forth by the sales rep, I highly encourage you to do proper due diligence and be sure that you are setting your business up for success.  I have personally seen too many deal promotions go sour due to improper planning primarily from the business side of things.

Before dropping a couple million on a Super Bowl advertisement, you would probably do some proper planning and preparation, right?  Well, one of the great things about running a deal promotion is that typically you will not have to put up any money upfront to run the campaign (which in and of itself makes doing this more appealing).  Nonetheless, properly planning for the deal promotion and structuring the deal correctly is vital to the success of your deal campaign.  If the promotion is successful, you can potential gain hoards of new customers.

Proper Planning & Preparation

Proper prior planning prevents piss poor performance.  It is wise to do your due diligence about the daily deal industry as it relates to the industry or market in which your business operates.  The goal is to find one or more similar companies to yours who have run a deal promotion and analyze their results.

Fully understanding competitor’s deals that they have already run will help you improve upon your daily deal offering, as you can get an idea of your competitor’s successes and failures in running a daily deal.

When you find a related daily deal that has been featured, it is a great idea to reverse-engineer the workings of the deal.  

• What were the pricing and promotional details of the offer?

• How many coupons / vouchers were sold?  Was there a maximum # of coupons available?

• What were the margins of the promotion?

• Any negative or positive side effects that you can see?

To properly reverse-engineer a daily deal, you will probably need to speak with the business, whom undoubtedly will not be interested in telling you specifics.  But you can get a somewhat accurate picture just by viewing the recent deal and inquiring to the actual deal site.

Proper preparation also entails educating your staff about the upcoming daily deal and scheduling the promotion properly.  It doesn’t make much sense to run a daily deal promotion during your busiest season or hours.

A few other questions that you can ask the actual daily deal site representative to help you prepare to run a successful daily deal promotion:

• Have you done business with a similar company as mine?  Results?

• What is the estimated redemption rate that your buyers typically redeem coupons?

• How much traffic and exposure does your site have?

• What is the average amount of sales that we might be able to plan for and accomplish?

Focus on Bringing Your New Customers Back to Your Business

If your business has trouble converting your new customers into loyal, repeat customers, you might find that running a daily deal is simply not for you depending on the type of offer you craft.

When you do run a deal, go above and beyond for the daily deal customers.

Subconsciously, you or your employees might want to give them “half-assed” service because they only paid half or less, but the exact opposite is true.  Work your tail off to make these customers happy and loyal.  In fact, it really should go without saying but the goal should be to turn customers into loyal customers regardless of where they came from or how much they paid.

When running a price reduction promotion, the importance of impressing your visitors, going above and beyond, and turning your new clients into raving new fans of your business is of utmost importance.  Follow up with the new customers you acquire by making sure you grab their contact information when they redeem their coupon, or get the information from the deal site itself.

Focus on delivering quality, gaining loyalty, and encourage visitors to connect with you on the social networks and write their raving reviews of your service.  Get these new clients on your email list, follow up with the new customers, and do everything you can to bring them back to your business.

Develop a customer loyalty program so that you can continually incentivize your customers to re-visit your business.

Margins are low when you run a daily deal.  Many deal sites will want to take 50% of the revenue generated on top of having you discount your product or service.  With that in mind, you shouldn’t expect to make bundles of money from the promotion itself.  In fact, many businesses take a loss on the front-end in order to acquire new customers.  Don’t forget too, that a core way to increase your revenue from a deal promotion is by using upsells.  Often times the daily deal site can offer upsells immediately after a customer purchases, but you can also upsell the customers once they are in your business.  Get them in the door, impress them, and offer related products, items, or services that make sense. For example a skydiving company would do everything in their power to upsell pictures or videos.

Analyzing Results

After running a deal promotion, it is important to continually analyze the results.  Pinpoint bottlenecks that happened, and ways to improve upon them.  Keep track of your coupon redemption rate.  How many people saw your offer? What was the conversion rate?  Take special note of this information as the goal is to improve upon the various conversion rates the next time you run an offer.

I invite your comments, suggestions, or stories about when your company offered a daily deal promotion.

Marc D. Horne
DailyDealBuilder.com

I originally posted this article on Daily Deal Media.