Daily Deals
I came across some interesting updates regarding the daily deal industry. Not exactly all intertwined, but at least all to do with the growth in the daily deal arena.
Firstly it’s now estimated that there are 482 of these sites in North America alone and they have just been joined but a heavyweight in the form of Amazon. They recently launched AmazonLocal in response to the growth of Daily Deals. Amazon are no strangers to the market as they already have an investment in Living Social.
Where they might have an automatic advantage is that Amazon has 144 million active customers who can be notified of any deals at a moment’s notice. They recently drew on their own resources with a $10 Amazon voucher for $5 and managed to sell over a quarter of a million of them (I’m unsure as to the email target bases on that deal – if it were all its active users it would be pretty poor redemption!) . That’s expensive customer acquisition at $5 a go, but the depth of that pockets there is not an issue. Definitely one to watch.
Continuing on that vain, a bit of potential enlightening data flashed onto the screen of late - the number of Daily Deal sites that are available in each European country. Now it has to be said that these numbers are not exact and should only be seen as indicative of the actual numbers. Nobody yet, to my knowledge, has anything that can be classed a concrete for each county.
According to the data we lie #9 in Europe with 34 sites offering...
There have been some very interesting studies conducted recently into the world of the ‘Daily Deal’ and coupon redemption. Perhaps one of the more interesting of these was conducted by Rice University in September of last year and again in June of this year.
But.... if you've been tempted, have a look at something we cooked up, a daily deal calcutator
Their research findings are a fantastic guide to any business tempted by the lure of a daily deal. Whilst many of the business running these deals are very satisfied with the outcome, many are not. There are some parts of this fairly intricate equation that businesses can influence and some are completely out of their control.
There are so many elements involved in these Daily Deal promotions that it’s really very difficult to isolate and pinpoint one or two key factors. In their September research, Rice University maintained that the two key drivers to success or failure of a Daily Deal were Employee Satisfaction and the coupons effectiveness in attracting new customers.
Employee Satisfaction is a massively important element. These promotions will (should) increase the workload of your staff or they may face extra hours. If there little in the way of recompense for the extra work, then it’s going to be an uphill struggle to succeed.
Another element that makes these promotions work is the number of new customers that return to an establishment and spend at full rates and your staff have a vital role in...
In an effort to try and bring some reality as opposed to hype Daily Deals, we've put together an interactive spreadsheet sheet to try and help you get to the bottom of the numbers.
There are so many variables it can really be a bit of a nightmare. But hopefully below will at least give you an indication of how a potential promotion might do.
There are a few items that you can fill in with certain levels of confidence and others that are very much picked out of the ether. One those, it’s best to try and err on the side of caution.
Face value is as it says; the normal price of the goods or services you are going to offer.
Voucher value is the promotional price. Discount is worked out automatically.
What percent will be new customers
What would, on average, be the spend of a regular customer
What are the costs of the goods sold (specifically the voucher good)
Number of vouchers sold and the percent redeemed
Number redeemed – we’ll default that at 15% not redeemed
“Sales above voucher” is trying to estimate the number of people that will buy more that simply what’s on offer. Change the % there
The percent of new customers that will come back again
The Daily Deal site cut
The cost proportion of the deal. From the face value, what’s the cost portion as a percent
Fill in these and see what you get at first pass. Then you can move some of the subjective elements...
