The idea is enticing: You could potentially drive hundreds, if not thousands, of new visitors to your small business by using daily deal services like Groupon or Social Living. But before you jump in, know the risks.
For those who aren’t familiar, daily deal sites offer flash sales featuring steep discounts that are typically over in 24 hours or so. But these popular services have some potential pitfalls you need to consider, according to Maryalene LaPonsie of Small Business Computing.
For starters, the sites can take half the sales price as a fee, which doesn’t leave you with much if you started with a 50% discount. If you get a lot of repeat customers, the cost might be worth it; otherwise, you may just wind up with a loss.
So here are a few tips for dealing with such sites:
Pick the right site: A small local site may get you in front of the right customers and be willing to negotiate too. And ask for references to find out how similar businesses fared.
Consider capping your sales at a certain point: You don’t want to wind up with more deep discounted sales than you can handle or afford.
Give customers a reason to come back: Giving daily deal patrons a special coupon for repeat visits is a good idea.
Adapted from Do Daily Deals Make Small Business Marketing Sense? at Small Business Computing.