How to turn daily coupon users into repeat customers.
Since their appearance on the digital scene. Groupon and its clones have gotten more attention than a gaggle of Kardashians. But in the wake of every overhyped Next Big Thing comes backlash. The 2011 Rice University study found that 26.6 percent of businesses actually lost money on daily-deal promotions, attracting one-off bargain hunters rather than the long-term customers. This left business marketers wondering: can daily-deal sites lead to sustainable customer acquisition?
For deals to be effective part of the customer acquisition process, they need to be combined with other best practices.
Understanding lead-gen costs. Deal sites tend to work best for companies with deep margins on their products, ones that can absorb the cost of the promotion as a loss leader, Johnson says. Gaffo's Muller says his team applies some analysis before running a deal. "We'll say, 'OK, it may $5 in marketing to get a new customer, so we'd be willing to take a $5 loss on one of these deal sites for the chance to acquire more people as regular customer," he explains.
Communication. While deal sites provides clients with analytics and demographic data, it's usually up to the business itself to capture purchasers' contact information. When deals are redeemed, the business should make a practice of logging the customer's name into a database or point-of sale system so other offers or content can be sent to encourage future purchases.
Analysis. Not all deal sites are created equal. Muller likes to work with well-established sites like Groupon and LivingSocial, because they usually send him deal information and analytics within 48 hours. Businesses should track results and use the sites that work best for them.
Customization. One site SocialTwist, helps companies choose a deal or promotion that works best for them, so they're not locked into the 50 percent-off model most sites employ. SocialTwist also integrates social media elements into a promotion, and as a result, customers can like a business's Facebook page or follow them on Twitter, which can lead to longer term interaction.
Since their appearance on the digital scene. Groupon and its clones have gotten more attention than a gaggle of Kardashians. But in the wake of every overhyped Next Big Thing comes backlash. The 2011 Rice University study found that 26.6 percent of businesses actually lost money on daily-deal promotions, attracting one-off bargain hunters rather than the long-term customers. This left business marketers wondering: can daily-deal sites lead to sustainable customer acquisition?
For deals to be effective part of the customer acquisition process, they need to be combined with other best practices.
Understanding lead-gen costs. Deal sites tend to work best for companies with deep margins on their products, ones that can absorb the cost of the promotion as a loss leader, Johnson says. Gaffo's Muller says his team applies some analysis before running a deal. "We'll say, 'OK, it may $5 in marketing to get a new customer, so we'd be willing to take a $5 loss on one of these deal sites for the chance to acquire more people as regular customer," he explains.
Communication. While deal sites provides clients with analytics and demographic data, it's usually up to the business itself to capture purchasers' contact information. When deals are redeemed, the business should make a practice of logging the customer's name into a database or point-of sale system so other offers or content can be sent to encourage future purchases.
Analysis. Not all deal sites are created equal. Muller likes to work with well-established sites like Groupon and LivingSocial, because they usually send him deal information and analytics within 48 hours. Businesses should track results and use the sites that work best for them.
Customization. One site SocialTwist, helps companies choose a deal or promotion that works best for them, so they're not locked into the 50 percent-off model most sites employ. SocialTwist also integrates social media elements into a promotion, and as a result, customers can like a business's Facebook page or follow them on Twitter, which can lead to longer term interaction.
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