Websites using Daily Deals

Okay, let s break down the Daily Deals concept, covering revenue, alternatives, pricing, and customer care aspects. I ll provide a comprehensive overview.

What are Daily Deals?

Daily deals are limited-time offers, typically discounts on products, services, or experiences, available for a short period (usually 24-72 hours). The idea is to create a sense of urgency and encourage immediate purchases. They are often heavily promoted to a large audience via email, websites, and social media.

Overview

• Purpose: To drive sales, attract new customers, clear inventory, and increase brand awareness.
• Target Audience: Value-seeking consumers, bargain hunters, those looking to try new things, and those who are easily influenced by deals.
• Industries: Common in retail (clothing, electronics, home goods), travel (hotels, flights), dining (restaurants, food delivery), entertainment (events, tickets), and services (beauty, fitness).
• Key Elements:
  • Significant discounts (often 20-90% off).
  • Limited-time availability.
  • Quantity restrictions (sometimes).
  • Strong call-to-action (e.g., Buy Now! , Limited Time Offer ).
  • Visual appeal (attractive product photos or videos).
  • Easy purchase process.

Revenue and Business Models

There are a few models for generating revenue from daily deals.

• Direct Sales (Retailers): Retailers run daily deals directly through their own websites or apps. Revenue comes from the sale of the discounted products or services. The benefit here is the business keeps all the revenue (minus product costs and marketing), but they also bear all the costs of setting up and running the deal.

• Affiliate/Commission-Based Platforms (Groupon, LivingSocial, etc.): These platforms partner with businesses to offer deals. They generate revenue by taking a commission on each sale made through their platform.

  • How it works:
    1. The platform agrees with a business on a discounted price and commission split.
    2. The platform promotes the deal to its user base.
    3. Customers purchase the deal through the platform.
    4. The platform pays the business the agreed-upon amount (sale price minus commission).
    5. The benefit to the business is they get access to a large audience without having to front all the marketing costs. The downside is they only get a portion of the revenue.

• Hybrid Models: Some businesses use a combination of direct sales and affiliate platforms.

Revenue Considerations:

• Volume: The key to making daily deals profitable is selling a significant volume of products or services.
• Cost of Goods Sold (COGS): Even with discounts, businesses need to ensure that the revenue generated covers their costs.
• Marketing Costs: Promoting daily deals can be expensive, so businesses need to factor in advertising costs.
• Customer Acquisition Cost (CAC): It s important to track how much it costs to acquire a new customer through a daily deal and compare that to the customer s lifetime value (LTV).
• Repeat Purchases: The ultimate goal is to turn daily deal customers into loyal, repeat customers.

Alternatives to Traditional Daily Deals

If the typical 24-hour flash sale isn t ideal, consider these alternative approaches:

• Weekly Deals: Instead of daily, run deals for a longer period (e.g., a week). This reduces the pressure on consumers and provides more time for promotion.
• Themed Deals: Base deals around specific themes (e.g., Summer Savings, Back to School, Holiday Gift Guide ).
• Bundle Deals: Offer discounted prices on bundles of related products or services. This can increase the average order value.
• Loyalty Programs: Reward loyal customers with exclusive deals and discounts.
• Email Marketing: Send targeted deals to specific segments of your email list based on their interests and purchase history.
• Flash Sales (Less Frequent): Instead of daily, run flash sales less often (e.g., once a month). This maintains the sense of urgency without overwhelming customers.
• Early Bird Specials: Offer a discount for customers who purchase within the first few hours of a product launch or event announcement.
• Limited-Time Free Shipping: Free shipping can be a powerful incentive, especially when offered for a limited time.
• Buy-One-Get-One (BOGO) Offers: A classic promotional tactic that can drive sales.
• Social Media Contests and Giveaways: Generate excitement and engagement by running contests or giveaways on social media.
• Referral Programs: Incentivize existing customers to refer new customers with discounts or other rewards.

Pricing Strategies for Daily Deals

• Cost-Plus Pricing: Calculate your costs (COGS, marketing, etc.) and add a markup to determine the discounted price.
• Competitive Pricing: Analyze the prices of similar products or services offered by competitors and set your discount accordingly.
• Value-Based Pricing: Determine the perceived value of your product or service to customers and set a price that reflects that value.
• Psychological Pricing: Use pricing techniques to influence consumer behavior (e.g., ending prices in .99, using odd-even pricing).
• Loss Leader Pricing: Offer a product or service at a loss to attract customers, with the expectation that they will purchase other, more profitable items.

Crucial Note about Profitability: It s vital to calculate the actual profit margin on daily deals. Don t just focus on top-line revenue. Factor in all costs (COGS, marketing, labor, shipping, commission fees if applicable). It s better to have fewer sales with a good profit margin than a ton of sales where you re barely breaking even or losing money.

Customer Care for Daily Deals

Excellent customer service is even more critical with daily deals because you re often dealing with a surge in volume.

• Clear Communication:
  • Terms and Conditions: Clearly state the terms and conditions of the deal (e.g., expiration date, restrictions, return policy).
  • Shipping Information: Provide accurate shipping estimates and tracking information.
  • Contact Information: Make it easy for customers to contact you with questions or concerns.
• Responsive Support:
  • Email Support: Respond to email inquiries promptly (within 24 hours).
  • Phone Support: If possible, offer phone support during peak hours.
  • Live Chat: Consider using live chat to provide real-time assistance.
  • FAQ: Create a comprehensive FAQ page to answer common questions.
• Efficient Order Fulfillment:
  • Fast Shipping: Ship orders quickly and efficiently.
  • Accurate Orders: Ensure that orders are fulfilled correctly.
  • Proper Packaging: Package items securely to prevent damage during shipping.
• Hassle-Free Returns:
  • Easy Return Process: Make it easy for customers to return unwanted items.
  • Clear Return Policy: Clearly state your return policy.
  • Prompt Refunds: Issue refunds promptly.
• Proactive Communication:
  • Order Confirmation: Send an order confirmation email immediately after a purchase.
  • Shipping Updates: Provide regular shipping updates.
  • Post-Purchase Follow-Up: Follow up with customers after they receive their order to ensure they are satisfied.
• Handle Complaints Effectively:
  • Listen Empathetically: Listen to customer complaints and acknowledge their frustration.
  • Offer Solutions: Provide a solution that is fair and reasonable.
  • Learn from Feedback: Use customer feedback to improve your products, services, and processes.

Key Customer Service Considerations Specifically for Daily Deals:

• High Volume: Be prepared for a significant increase in customer inquiries.
• Urgency: Customers expect fast answers and resolutions during a time-sensitive deal.
• Potential for Disappointment: If products sell out quickly or there are shipping delays, customers may be disappointed.
• First Impressions: For many customers, a daily deal may be their first experience with your brand, so make it a positive one.
• Reputation Management: Negative reviews and social media posts can spread quickly, especially if there are widespread problems with a daily deal. Monitor your online reputation closely.
• Staffing: Ensure you have adequate customer service staff to handle the increased volume of inquiries. This may involve hiring temporary staff or outsourcing customer support.
• Training: Train your customer service staff to handle the specific issues that are likely to arise with daily deals (e.g., sold-out items, shipping delays, return requests).

In summary:

Daily deals can be a powerful tool for driving sales and attracting new customers, but they need to be executed strategically. Thorough planning, careful pricing, and excellent customer service are essential for success. Consider alternatives if the traditional model doesn t align with your business goals. Focus on building long-term customer relationships rather than just short-term gains.