How Daily Deals Can Help Your Business
Daily deals are a great method to spread brand awareness and receive more recognition. They are a great way to attract customers and receive future repeat purchases as well if done correctly. Use the following tips to ensure that you profit from holding a daily deal and are not losing money.
Top 4 Elements You Need to Make a Profitable Deal
• Expire your offer on a slow day.
• Lengthen your deal to prevent a rush of customers.
• End your offer within 8 months or less.
• Know how much business you can handle at once.
• Know your statistics. Ask the deal site for the total number of users and the percentage of potential purchasers for your offer.
• A sold out deal is desirable, as it can bring you more exposure.
• Know your goals and decide how much you value profit over long term customer value.
• Find out what your minimum price is to cover your costs.
• Research to know how much your average customer spends and set your value below that number.
Terms and Restrictions
• Discuss your goals beforehand if you want a short term profit.
• Offer your deal during slow business.
• Open your deal to only new customers.
• Cap the amount of vouchers that can be purchased per customer.
Ways to Ensure Profit
1. Know your Cost of Goods Sold (COGS) and your Average Customer Spend (ACS).
Ex. If you offer a batch of cupcakes for $15 and it takes $12.5 to make it, your profit will be above $0.
2. Set a limit on your offers and make sure your offer value is smaller than ACS.
Ex. If you sell $35 worth of cupcakes for $15, and the ACS is $40, your overspend value is at $5.
3. Set a cap on the quantity of daily deals available per month and the amount of time the offers will continue.
Ex. If you set a cap at 1000 offers with 60% capacity and the average orders per month are 100 per month, your offer will be available for 6 months.
By following these tips, you can avoid becoming a daily deal horror story. Know what works best for your company and set limits to prevent any mishaps. Sticking to your rules will make sure that your efforts bring profits and loyal customers in the long run.