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Monday, October 3, 2011

Daily deals: “Value” is not just “cheap”

Today’s New York Times held yet another article suggesting gloom and doom for the so-called “daily deal” coupon providers, such as Groupon, Living Social, and others.  Click here to see the full story.

Implications:   As I wrote back in April [see “Daily Deals go mainstream”], daily deals are not all bad.  It’s just that you have to have a plan that will yield lots of first-time trial, but in a way that you can retain those customers over time, and gradually build a relationship that allows you to sell your product or service at a reasonable margin.

Don’t think of daily deals as a win-or-lose ad campaign.  Ask whether you can convert those lowball consumers into consistent spenders over time.  Without thinking ahead, you’re setting yourself up for a campaign that succeeds… at your expense.

Don’t just focus on the daily deal.  What comes next?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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