How to effectively utilize daily deal sites for local business

I’ve run numerous “daily deals” for local businesses over the years and I’m starting to notice some interesting trends that I thought would be worth sharing. Some of these observations may be obvious, some may not.

• Living Social has a surprising number of people that aren’t “cheap” and looking for a steal. It seems they’ve found an interesting medium of deal seekers and people that just like to find something new and exciting to do and they use Living Social as a means to find it.
• If your deal is for a workshop or lesson of any kind, be very careful how you list dates. People make all sorts of assumptions. For example, if you have one date they tend to freak out and think thats the only available date, and not buy the date doesn’t work.
• Most deal sites will NOT give you your customers contact information, you have to wait for them to contact you and inevitably some wont ever contact you or redeem.
• Keep in mind that most deal sites charge 50-52% of the gross, when coming up with your price.
• Also keep in mind that you need at least a 50% discount on most deal sites off of your regular price.
• If your description is too generic, like most deal sites want it, you are going to get a lot of people that don’t know a thing about what your service is. For example, if you are giving out guitar lessons, and you let them write a generic “learn how to play” description, you’re going to get people that never touched a guitar. For some people that is frustrating. It just depends on the type of customers you want. The more descriptive the more targeted customers you will get, but also the fewer sales in a lot of cases. There are a lot more people that want to learn to play guitar and take an intro lesson than there are that want to have advanced lessons.
• A lot of deal sites wont let you use your own images, they prefer stock type images because they are concerned with legal issues.

Overall contrary to the negative comments above, I really like deal sites. You can make a lot of money and get a strong customer base that will keep buying from you after the deal is over.

I’ve worked with a number of local businesses that have had great success. Selling just 30-50 deals for a 1 time workshop can result in 10s to 100s of thousands of dollars a year in recurring revenue.

It’s a balancing act to effectively utilize a daily deal site, and its sometimes a shouting match to get the deal site to use your description over theirs. But at the end of the day, I’m very happy to tell a local business to use daily deal sites.