What Don Corleone Can Teach You about Daily Deals

The economy is hurting. We get it.

As business owners and marketers, we’re looking for ways to create a solid cash flow.

Everybody likes a good deal so it’s worth taking a closer look at something like Groupon, right?

But if all you can come up with is a sorry-ass excuse for a daily deal, then the economy isn’t ruining your business.

You are ruining your business.

Don Corleone wouldn’t approve if that happened, so let’s look at how you can make an offer that nobody can refuse.

The Cold Hard Truth behind Groupon Deals

Groupon is huge. The company saw its revenues sky-rocket from $33 million in 2009 to $760 million in 2010.

Unfortunately, merchants haven’t experienced the same level of success.

It wasn’t even close.

Roughly one out of three merchants failed to make a profit.

Between 10% and 77% of merchants would run a deal again, a far cry from Groupon’s claim of 97%.

 

What if customers return to become loyal customers?

That would make running a deal worth it, right?

Yes, except customers aren’t coming back.

Groupon has become like a railway network.

Each train represents one day with fresh offers.

Each station has merchants offering deals.

Customers get off the train at each station and don’t stick around.

They board the next train and ride to the next station.

 

Add in the finding that 82% of merchants are unsatisfied.

As well as a couple of bad experiences here and there.

Suddenly, marketing on Groupon sounds like a bad idea, right?

Not so fast.

 

Groupon Doesn’t Run Your Business

If you fail at a Groupon deal, it’s not Groupon’s fault.

Groupon doesn’t run your business.

You are responsible for your business.

You are your own Godfather.

Like the Godfather, you know what’s in the best interest of your business.

You know what makes your customers tick.

 

The Psychology behind a Good Daily Deal

Everybody likes a good deal.

It’s getting something at great value.

It’s something worth sharing with others so they can get in on it as well.

When you offer a good deal, you’re triggering people to take action.

 

At the same time, you want to impress.

You’re looking to make people feel special for taking you up on your offer.

You’re aiming to provide people with such an amazing experience that—even at the regular price—your product or service is a steal.

That’s how you create loyalty and encourage word-of-mouth promotion.

 

When you only focus on attracting new customers through deep discounts, you’re diluting your brand, your product/service and—in some cases—even your entire industry.

Imagine you’re running a nail salon and you’re offering a manicure/pedicure deal at 50% discount.

Where does that leave you once the deal ends?

Potential customers might not even consider visiting your salon (again), because their value perception of a treatment has changed.

 

Don’t treat a daily deal offer as a quick way to make money.

Your daily deal offer should be compelling to both new customers and existing customers.

Remember who your existing customers are.

Your best customers are among them.

It’s up to you to not alienate them or make them feel cheap.

Focus on creating a deal that triggers action and creates loyalty.

 

How to Make an Offer Nobody Can Refuse

Here are three considerations to help you create a Godfather-worthy daily deal offer.

1. Create Excitement

Offer a deal that people can genuinely be excited about.

Make it go viral by giving it personality and making it special.

Make your offer so unique and remarkable that people have to sign up and share it with their friends before it’s gone.

 

2. Deliver Value

Everybody wants a good deal.

Nobody wants to feel cheap though, especially not your existing customers.

Give people at least one good reason to want to come back.

Make your offer (and delivery) worth even more than the regular price.

Focus on proving your worth and creating loyal customers.

 

3. Offer a Bonus

Discounts are evil, because they change your customer’s price perception forever.

Consider offering a bonus.

Try offering something like “buy one, get one free”.

It works out to be the same as offering a 50% discount, but with two key differences:

• You won’t dilute your brand or your product/service. People will still pay the full amount for the first time, but they’ll get the second time as a bonus.
• You’re guaranteeing repeat business. Even if the second time is free, people are going to come back and you’ll have a second chance to stay top-of-mind.

Bonuses work well because people perceive them as things that would normally cost extra.

The only condition is that the bonus has to be something your customers would actually want.

It could be a second treatment, a free gift, a free trial, a month’s membership, or a related product or service.

As long as it offers true value to your customers.

 

Bottom Line

Offering a daily deal should be about more than just slapping a discount on your products or services.

Your business deserves better than that.

Work hard on creating the right offer and your customers will come. Again and again.