With so much drama surrounding the daily deal industry, it makes many wonder whether the daily deal phenomenon is fizzling out?
I’ll give you the short answer. No.
To really understand the daily deal industry and model, we need to start by looking back to coupons, which have been around for thousands of years…
Well, maybe not thousands of years. The first documented case of the brilliant advertising technique that essentially gives customers something for nothing is documented in 1887. Atlanta based company, Coca-Cola, transformed their business from an insignificant tonic into a profitable powerhouse by using innovative advertising techniques.
Asa Candler, Coca-Cola’s founder, implemented an ingenious marketing strategy which included having the company’s employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed to potential customers and placed in magazines. The company gave coupons for a free drink, which were 5 cents at the time.
Estimates show that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8.5 Million free drinks. By 1895 Candler announced to shareholders that Coca-Cola was served in every state in the United States.
Today, they are the most well known brand in the world and many might argue their use of coupons helped get them there.
Since then, businesses around the globe took notice of the coupon and began acquiring new customers by giving great deals and coupons to them. Tens of millions of consumers have used coupons.
Although the documented first use of coupons only goes back to 1887, I can only envision market vendors thousands of years ago letting consumers try taste tests before they buy, and consumers haggling with vendors to get better deals. 2 apples for the price of 1 anyone?
The human desire to get a great deal and receive more value than we pay for is nothing new.
Fast forward to the early 1990’s when the internet was invented, and it comes as no surprise that savvy merchants began offering coupons online, and thrifty consumers began downloading them. In fact, the demand continues to grow as more and more consumers gain access to the internet and smart phones.
Using coupons and daily deals has been and will continue to be a superb way for businesses to acquire new customers and turn them into loyal fans.
Just like Coca-Cola, however, the businesses utilizing coupons and daily deals must be confident in their product or service so they can take an initial loss in order to grow new fans.
Daily Deals are essentially coupons that are offered for a limited time, typically for only one day, hence the name daily deal. Often times, the customer can simply download the coupon for free; other times they pay for the coupon in advance and simply redeem them before they expire.
Yes, offering coupons and daily deals has transformed and helped many businesses grow, however, it can easily go wrong.
Sometimes the daily deal site messes it up by sending in overzealous sales reps to lock in deals. Unknowing business owners might agree to run a coupon or daily deal without fully understanding the ramifications, and the fact that doing so will put their business in the red. Far too often, a daily deal is destined to fail before it is even run.
The only businesses who should offer coupons and daily deals are the ones who are proud of their product or service, and know that they can turn one time users into repeat customers.
To do it right, the business must not only be confident in their product and service, but properly follow up and encourage the daily deal customer to become a loyal fan.
What do we know?
We know the “idea” behind the daily deal works. People are more likely to make a purchase when there are time limits and scarcity tactics in play.
We know that the majority of people enjoy getting a great deal or discount, right? We also know that people have been bargaining and trying to get deals on all sorts of items since… well, since before our times.
We know that the internet and smart phone devices have made consumers wiser and give them ability to research companies and search for deals and coupons while on the way to the merchant.
Advertising mediums change often; solid marketing strategies are timeless.
In 1887, Coca-Cola reps were giving out coupons in person and running them in magazines. In 2008, folks started downloading and redeeming coupons on their mobile devices and phones.
The mediums used has grown and evolved, but the strategy remains the same. Give a consumer a deal to come into your business and win them over by over delivering and exceeding their expectations.
Make moves today,
Marc D. Horne
DailyDealBuilder.com
I originally published this article on Daily Deal Media.
