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Group Buying Melissa de Andrade
@MelissadAndrade
The Daily Deal
PhenomenonCheck my Social Media blog: melissadeandrade.com
What is a Daily Deal website?Sales tactic that uses
collective buying power
to offer
limited time discounts
that are valid only once
a certain number of
vouchers are soldVoucher Price
| Discount | How many
bought | Time left |
Rules |
** The more
customers
engage their
friends, the more
benefits they get
(including free
vouchers or even
more reduced
prices)
melissadeandrade.com
INDUSTRYOversaturated The daily deal aggregator Yipit now sifts through 30,000 deals a month from some 650+ daily deal sites
Group buying is a strong business
But...
MERCHANTSNot always profitable56% of businesses made money from daily deal promotions, while the rest either lost money (27%) or broke even (18%)
CUSTOMERSMay be suffering from daily deal overkill, Groupon remorse or daily deal regret melissadeandrade.com
Focused on small, good brands for moms-$150 million in revenue expected this year-4 million members and 40,000 units sold from 700 different items a day
melissadeandrade.com
Focused on deals for men- Bring relevant deals to subscribers- Bring audience that’s relevant to merchants
melissadeandrade.com
Not Always Profitable for Merchants
75% off deal on a dozen cupcakes
Expected a few hundred orders
8,500 people took the deal
They lost thousands of dollars
Each sale meant a $4.50 loss
They had to pay $19,000 for extra staff and shipping charges for the 102,000 cupcakes.
melissadeandrade.com
Group buying brings:
Big advertising boostIncrease visibility Exposure to many new customersA way to test a new product or service Extra inventory can be moved quickly.
Some hints to consider
Group buying can be part of your marketing strategy but it should not be ALL your marketing strategy
melissadeandrade.com
Enhancing Groupon experience for the merchantChallenges Recommendations
Groupon does not build loyalty
Build loyalty yourself! - Build a unique experience for Groupon people- Use social! Motivate them to follow you on Twitter or like you on Facebook for further promotions- Use social! Ensure they provide positive feedback on social media tools. Group buying is a tremendous opportunity for positive ratings
Groupon buyers are bargain shoppers
Offer you own discounts!- Have an additional product with special price for Groupon people- Offer 50% off to bring in someone new (who will pay either full price or a slightly reduced price)
Groupon does not make financial sense
Evaluate and negotiate!- Think: Is Groupon for your business?- If so, use marketing budget to invest in group buying- Push daily deal services to accept a smaller cut of voucher sales- Shorten the redemption period, so that the business can plan carefully for the rush of new customers- Offer loyalty programs via text message, email, Twitter, Facebook
melissadeandrade.com
Voucher Price | Discount | How many bought | Time left | Rules
Promote Deals yourself!
melissadeandrade.com
ReferencesGroup Buying White Paper - Harvard Business Schoolshttp://www.slideshare.net/HackStartups/group-buying-white-paper
Considering Offering a Groupon? Read This First.http://socialmediatoday.com/jgibbard/337550/considering-offering-groupon-read-first
Group Buying: Key To Your Business's Social Media Strategyhttp://www.huffingtonpost.com/robert-ball/group-buying-is-key-to-yo_b_802560.html
Beyond Groupon: Daily Deals Evolve, New Competitors Emerge http://www.huffingtonpost.com/2011/11/23/groupon-daily-deals_n_1088436.html
Group Buying Versus Traditional Lead Generationhttp://www.huffingtonpost.com/robert-ball/group-buying-versus-tradi_b_813552.html
Retail Software: Your Groupon Advisor http://blog.softwareadvice.com/articles/retail/retail-software-your-groupon-advisor-1072911/
Pros and cons going Grouponhttp://socialmediatoday.com/caroline-jorgensen/379110/pros-and-cons-going-groupon
Groupon: winner or goat http://socialmediatoday.com/drewmclellan/263868/groupon-winner-or-goat
Google Offers vs Groupon vs Facebook Dealshttp://www.digitaltrends.com/social-media/google-offers-vs-groupon-vs-facebook-deals/
Will Groupon really boost your local businesshttp://www.socialmediaexaminer.com/will-groupon-really-boost-your-local-business/
Group buying local businesshttp://mashable.com/2011/01/20/group-buying-local-business
How daily deals are losing their allure for business and consumers alikehttp://moneyland.time.com/2011/08/30/how-daily-deals-are-losing-their-allure-for-businesses-and-consumers-alike
melissadeandrade.com