Daily Deal Sites: Keeping It Real Relevant

  |  September 20, 2011   |  Comments

Since many daily deal sites are basically online retailers, they need to adopt the same level of personalization and lifecycle marketing that successful online retailers are known for.

As I type this, I'm sitting on a beach in Positano, Italy, enjoying both a cappuccino and a gelato - because I am, after all, in Italy. While I may be thousands of miles from home, I'm still connected to the "real world" by my international Android phone, which has just let me know about an amazing LivingSocial deal for $10 off $20 at one of my favorite grocery stores, Whole Foods. Even with most of my attention being occupied by beautiful scenery and culinary delights, I couldn't resist that kind of deal. So, here I am on a beach, on the other side of the planet, buying another daily deal. If only I automagically received an offer to take me to Capri, that would be the ultimate expression of sending the right message to the right person at the right time. And that's exactly what daily deal sites need to focus on to survive.

At their core, many daily deal sites are online retailers, and that means that they need to adopt the same level of personalization and lifecycle marketing that successful online retailers are known for. When the crux of your business model is sending a deal every day, you need to make sure your offers are relevant. Anything short of that will send your customers to the unsubscribe link. While group-buying sites like Groupon have been criticized by consumers for not being targeted enough in their deals (how many other men out there have received deals for waxing and manicures?), there are also good examples of targeting and segmentation from private-sale sites like HauteLook and Zulily.

Anyone familiar with HauteLook and Zulily know that both of these flash commerce sites specialize in selling fashionable goods at discounted prices. If you're signed up for their email lists, you'll also likely know that the offers they contain are a little more targeted than many group-buying and even other flash-sale sites. One of the reasons that they can be more targeted is because they've been able to grow their inventory of flash commerce sales to a critical mass where they can communicate different products to different segments. But, while this does give them an advantage over sites that promote a much more diverse set of products to a much more diverse audience, it still does require some work to analyze the data appropriately to line up the right deals for the right customers - and these two sites should be commended for that.

In order to generate higher opens, clicks, and conversions, HauteLook segments its daily deal alerts based both on gender and powerful site-browsing behavior. With its target of moms, babies, and kids, Zulily for its part segments its sales alerts based on age, gender, and life stage. The goal of this targeting by both organizations is to create an even richer and more personalized experience by leveraging their vast amounts of data. By actually featuring products that their customers want to receive, they not only generate more sales, they establish a trust that is crucial for building brand loyalty.

Another thing these brands do well is to recognize that certain registrants need to be reminded why they registered. The majority of flash commerce customer files are made up of consumers who have never bought - not even once. Not surprisingly, this customer segment tends to become unengaged. When customers haven't opened or clicked an email for 90 days or more, they are ripe for a reengagement campaign. In order to bring this lapsed population back into the fold, both brands are constantly testing different tactics, including reduced cadence, "we miss you" campaigns, and sometimes a removal from the active subscription list. While this last option can be a scary proposition for some marketers, it's also equally scary to risk your deliverability at top ISPs that are looking at engagement metrics to filter email in their member's inboxes.

What makes HauteLook and Zulily smart marketers is how they go even further than reengagement tactics to look at how they can change the behavior prior to the consumer lapsing in the first place. By integrating carefully targeted welcome campaigns and other lifecycle campaigns (first purchase, birthday) into their email marketing mix, these brands are able to create a more personalized consumer experience. And in the end, that's what's going to keep the customer looking for your email in their inbox - even if they're on a beach in Italy.

Now, back to my gelato...

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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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