Tips to Successfully Running a Daily Deals Campaign
You offer your product or service with a huge discount of 50-90% off to subscribers of the Daily Deal site. You split the remaining revenues up to 50% with the site. The hook to get you to run the daily deal is your restaurant does not pay any cash upfront for a chance to get exposed to many new customers.
There is a lot of debate if running a Groupon / Living Social is good for restaurants. It can devalue your brand and make it harder to get full price. Daily Deal customers are not as loyal as your regular customers. Restaurants can be overwhelmed by the amount of customers and often leads to lowering the businesses review site scores online.
Studies have shown that owners have mixed opinions about doing another Groupon / Living Social or Deal of the Day campaign. University Study of actual business owners that use Daily Deal sites that only 36% of Restaurant owners would do another marketing campaign.
For many restaurants, particularly new or struggling ones, hordes of new customers flocking in because of the big deal may seem appealing. For some restaurants, fatal mistakes with a daily deal can almost force them out of business. However, Daily Deal sites can be a tremendous resource for New Customer Acquisition.
The major problem is most restaurants do not know how to keep that new customer coming back. Only 20% of the new customers returned to pay full price.
At the minimum, every restaurant needs to capture the contact info of the new customers and follow up regularly. The sad part is that I have purchased over 50 daily deals and zero restaurants have tried to get my contact info or follow up.
The key to a successful promotion starts with the planning of the promotion. Here are several factors to running a profitable Daily Deal marketing campaign.
What if 100 people sign up or 1,000 for your deal? Do the metrics work for you? You must weigh the ROI (Return On Investment) the same as you would for any marketing tactic. You need to set a limit of vouchers to sell base on your metrics and customer service levels.
Be Strategic in your Offers. Structure your promotion so it is a win for you and provides value to you customers. Offer a Bonus or an Up sell when they visit your establishment that is low cost to the restaurant but it offers a High Perceived Value to the customer. Maximize revenue per transaction.Your job is to get your customers in for the long haul and pay you upfront.
Have your Website and other Promotional items ready to go Day One. Make sure your website has a fresh look. Make a special page for your Daily Deal customers. Update your Facebook and Twitter accounts with lively dialogue to capture new visitors. Have your mailing list on every page.
Make sure that when these shoppers visit your website or walk into your establishment, they have the opportunity and incentive to join your Mailing list. If you do not have a way to gather data, now is the time to do it. Use the prospect’s information to send them a promotional email once per week during your Daily Deal promotion. Use the prospect’s information to create an inexpensive postcard campaign to get the customer back into the business. Set up a SMS (text marketing campaign).
The true value of a “daily deal” promotion is not to get a ton of customers through your doors. The true value is to get those one-time opportunity seekers to come back to your establishment. If you offer Quality, Value, and Great Customer Service that exceed their expectations, they will more likely be repeat customers and give your business referrals, if you capture their contact info.
Is everyone on the same Page? This has been proven to be one of the most effective factors to a great promotion. Have you made it easy for your customer to redeem their coupon? Has your staff been trained to handle this influx of business? Have you stocked up on inventory to meet demand? Have you cancelled vacation time for employees or brought in help to assist with the new traffic? Create an employee training program to teach the employees how to up sell Daily Deal customers.
Past Daily Deal results provides compelling evidence “satisfied employees” is one of the most important factors for the Daily Deal promotion to be successful. The restaurant owner could do this by preparing their employees for the barrage of customers that ensue from the promotion, and compensating them adequately such as for lower tips received because of the deal-prone orientation of many Daily Deal users, or for working longer hours. If employees remain satisfied through the promotion, the likelihood of its profitability is significantly higher.
Do not upset your loyal customers. Be careful not to alienate your loyal customers who have been faithful for years. You may want to create a “Customer Loyalty” promotion to make your current customers feel special.
Finally a week after the Daily Deal promotion, run another special promotion to all those who bought the service. You could offer a voucher of slightly higher value for their friends and family.
Do not mistake these “Daily Deal” sites for a Marketing Strategy. Continued use of these promotions can destroy your profitability. Training old and new customers to look for your “daily deal” coupon will ultimately devalue your products or services. You will end with razor-thin margins and you will never be able to sustain a profitable business. It is not a good idea to run a Daily Deal more than twice yearly.
2 Bad Examples of How Not to Run a Promotion
The first company I went to was closed twice when we went there. Normally, they are open, but in these cases had a sign on the door. Combined with an average online review, they are throwing money away.
The second example was running out of food the last few days before their promotion expired. They would not extend the deal. Needless to say, I will never be back. This same restaurant was on one of the reality shows the year before due to their restaurant doing poorly. Guess, some people never learn.
If you are going to do a Groupon / Living Social or Deal of the Day, do it right. The key is to think long-term and take the steps needed that have been mentioned previously.