Standing Out in a Crowded Daily Deals Field

  |  September 6, 2011   |  Comments

Innovation and timeliness are key - just ask Groupon and HauteLook.

There's been a lot of buzz in the past week about Groupon's traffic reportedly taking a significant dip since June. Depending on whom you believe, the decline might look like the death knell of daily deals sites, or a blip due to seasonality or oversaturation. Experian says traffic is down 50 percent since June, while Compete puts the number at a much less severe 9 percent.

Regardless of which data point is correct, anyone with an inbox knows that consolidation is inevitable. Only those that have gained the most market share through innovative programs, or that have become the go-to company in a profitable niche will survive. If you're a marketer at a daily deals site, the question is how you become one of those companies. This column will explore some avenues to increase your chances of building a successful group buying or flash sale site that will stand the test of time.

Innovation Is Key - A Lesson From Groupon Now

When it comes to group buying, Groupon is the de facto leader, but companies like LivingSocial and Google are trying desperately to alter the balance of power. Google made news last week by promoting one of its daily Google Offers on its search page - which is a significant change for a page that usually only features a search box and two search buttons.

With such competition, and a business model that is fairly easy to replicate, Groupon knows it has to innovate, and that's exactly what it's doing with Groupon Now - a location-based coupon service that allows merchants to fine-tune their offers by delivering coupons to passersby at times when they specifically need to drum up business. In essence, they create a win-win for both merchants and consumers. Merchants get to fill seats or drive traffic at notoriously slow times, and consumers get to find hot deals in their immediate vicinity. With Groupon Now, it has flipped the deal notification model - instead of sending out the daily deal to everyone, consumers are trained to look for deals when they want them.

Be Timely - HauteLook's Virtual Stampede

For flash sale sites with limited inventory, alerting customers in a 10-minute window prior to the start of a sales event is essential for driving participation and maintaining customer satisfaction. If a customer gets a delayed message and all the good inventory is already sold out, there's a good chance they won't click on the next announcement.

Fashionable private sale site HauteLook understands the importance of being able to deliver sales alerts to all relevant members prior to a sale. As its customer base grew, HauteLook invested in an email marketing solution that would allow it to personalize and deliver millions of messages in a 10-minute window, which has succeeded in creating a virtual stampede for each event. Relevancy is also key, which is why the company customizes each message to showcase the offer best suited for each recipient.

In the simplest sense, you need to tell customers when relevant offers are available, and get that message delivered five to 10 minutes before the sale.

Solicit Feedback

With so many daily deals sites vying for consumer attention, exceeding customer expectations is key for thriving in such a competitive space. Of course, in order to exceed expectations, you need to know what they are.

Make sure you provide mechanisms for customers to easily provide feedback - and not just on your business as a whole, but on your offers and messages. A simple "Thumbs Up/Thumbs Down" button next to an offer sent via email could go a long way to helping you tailor offers for each customer - which is essential in an overcrowded inbox. By using that data to filter out irrelevant offers, you can increase the value of your communication in your customers' eyes. In essence, you're training them that you only send messages that might be of interest. Groupon could take a lesson here, as I can't count how many offers I've received for manicures and waxing.

Creating controls for frequency can also help keep you from burning out your customers. If you send multiple offers a day, consider giving an option for just one - or put a "No More Today" button in the first email to prevent others from being sent. By soliciting feedback, you can better understand and cater to your customers' needs.

Go Mobile

Mobile apps are the workhorses that make location-based services like Groupon Now possible; however, while mobile apps are important, you should also consider how your members interact with your email notifications on their mobile devices. By creating native sites optimized for mobile rendering (HTML5 takes you a long way there), you can make it easy for customers to respond to an email notification on-the-go. By having an email call-to-action take users to a mobile-friendly location, you can generate conversions from customers who would otherwise have missed out on your sale. Mobile and email are still very complementary, so don't ignore the potential of optimizing the experience across both.

Daily deals will be with us for a while, but not all companies will survive. The tips above will help make sure that your business will stand out from the crowd and be around for the long term.

Stay tuned for my next column, where I'll focus on dynamic personalization in deal-of-the-day offers.

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ABOUT THE AUTHOR

Tal Nathan

An industry veteran, Tal Nathan has been helping organizations deliver valued and effective email marketing services for more than 10 years. In his role of vice president of client services, Nathan manages all client services for StrongMail to ensure that their respective clients receive the highest level of professional service available in today’s competitive marketplace. Previously, Nathan served as vice president and general manager of client services for Epsilon, where he led online strategy for the company’s top-tier clients, with a focus on the retail, travel and financial verticals. Prior to Epsilon, he was the vice president of client engineering at infoGroup, where he led and managed integration services for its Yesmail division. No stranger to technology, Nathan began his career at BDO Seldman, where he provided a range of business management and technology services to Fortune 500 companies. Nathan holds a BS in mechanical engineering from UCLA.

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