When Will the Daily Deal Sites Learn to Listen to the Business Owners and Give Them What They Want?

Over the last few years, I have been watching the growth of the Daily Deal phenomenon with much reservation as to its true benefits. I can assure you I am not alone in that respect and it is evident with all the negative press that has been floating around the Internet.

What really surprises me is the amount of investment dollars that are pouring into the various leading companies of this business model. I haven’t determined if they are short term profit seekers, investors who need a write off or possibly just stupid. Somehow I can’t believe that the level of investor who can afford to invest millions of dollars into a business wouldn’t look beyond the hype and promotion and investigate the future impact on local economies from this type of lazy marketing.

I call it lazy marketing because it is just that! Anyone can cut their price and drive traffic with profit losing pricing. Consumers will buy products and services they don’t even need if they think it is such a cheap price, but what it will eventually cause is price increases and small business collapse. Everyone is hurt by competing on price. Business A cuts their price by 40%. Business A’s competitor, business B cuts their price by 50% and the price war continues as we watch both businesses discount their way right out of business. Who loses? The consumer in the long run and their communities.

As more and more Daily Deal sites pop up I keep wondering why they don’t ask their customers what it is they really want when it comes to their marketing and the ultimate results. Then design an appropriate marketing program that will meet their needs. We know the business owners all want more business and that it seems is the driving force behind the sales pitch of the Daily Deal Companies, yet they still don’t offer any sort of data mining, database creation or incentives to get consumers back into the business as repeat customers. When asked why they don’t offer these services the general response was, “it is up to the business owner to provide their own tracking and database development, customer service and quality service. We provide our customers to the business and it is up to the business to take it from there.” We think the Daily Deal companies are missing the point… It’s not about customer acquisition, it’s about customer retention.

When we surveyed a number of businesses who had been approached by numerous Daily Deal Services, some who actually offered a daily deal and several that passed, we found that an astounding 87% of those businesses surveyed indicated they wanted the following:

1. Some sort of cash back rewards to value their business and use for the consumers next purchase. No points, no coupons being mailed for redemption, or punch cards. Simply an easy to use card system that could track spending within the business and store rewards and incentives for future visits.

2. Relevant communication NOT an email blast to thousands of deep discount shoppers but to qualified shoppers interested in the products and services offered. The ability to build a database and query the data to send offers based on purchase or visits.

3. Special offers and members only benefits. They wanted to know how to create a membership program in their business, something easy to understand and lucrative to both the consumer and business.

4. Support for their local community or heartfelt charitable contributions with every purchase. Not blanket donations but cause marketing tied to each transaction. A benefit for the business, the consumer and the community.

A whopping 87% of business owners surveyed have said they would find this type of promotions far more appealing and beneficial to their business.

When we surveyed consumers, over 92% said they would frequent a business more often and spend more money if the business would just listen and supply the above offers. The future of the Daily Deal Deep Discount craze will be looking at a slow death unless they learn what they need to do to grow their business is start listening to their customers and then they might be around for the long haul. It seems so obvious.