Daily Deals: Strategies and Barriers
In my last blog post, I discussed my experience with using a daily deal with a hair salon client in Melbourne. I gave you an idea of the company’s goals and the reasons the daily deal promotion was very appealing for this business.
In this post, I will address the strategy behind this promotion and some of the barriers we met along the way. I hope this will be of assistance to any marketer or small business owner thinking about using this relatively new marketing outlet.
In any business, it is important to have a plan in place when dealing with daily deal websites. I believe for this type of promotion, it is even more important because it is very tempting, especially for small or new businesses, to run with a daily deal for an immediate cash flow but the specifics of the deal and the way it is executed are an after thought.
So how to make it work?
The deal at Urchin Studio1
After much deliberation Next Marketing and Urchin Studio1 decided on a Global Keratin treatment that retails at approximately $500. It was sold on a daily deal website as a ‘small side deal’ for 48 hours. The deal was priced at $149 and the service was valid for six months.
The Marketing Strategy
While it may not be immediately obvious, the type of deal that is sold is incredibly important to the overall success of the activity. Given there is a significant discount involved, the deal must be put together in a way that encourages or directly leads to add on sales.
For example, Next Marketing and Urchin Studio1 came to the conclusion that a Global Keratin treatment would be perfect for a daily deal promotion as there were opportunities to sell shampoo, conditioner and other products designed to support the application of the Keratin treatment.
To support the deal when it went live, Urchin Studio1 created a special landing page on their website explaining the treatment and giving potential clients a ‘heads up’ about the need to buy additional products. This helped with in salon sales as well.
Once the deal went live, Urchin Studio1 sent out an email campaign to a hand picked list of previous clients who hadn’t visited their new location. This also led to some new bookings.
As in any marketing pursuit, we were met with a few barriers.
- Profitability with deal price: This is very tricky and it is easy to say yes to a deal price without really considering how much the deal will cost in real terms. We had worked out our numbers and stood firm on our price points.
- Copy and Images: Each deal supplier has their own style of writing and a library of preferred images. We supplied pictures from Global Keratin to ensure that images used would show models that had the treatment put in their hair.
- Number of deals sold: We were very aware of the risk that the deal may not sell but hadn’t thought about what would happen if too many people took part in the deal. Luckily, Urchin Studio1 could deal with the extra demand, but it could prove extremely detrimental to a business that could not cope with the additional clients.
All in all, the daily deal site is a third party business. This degree of separation allowed for Urchin Studio1 to maintain its reputation as a premium supplier, rather than a discount salon.
Next post, I will discuss the results of this deal and my final word on daily deal sites…