Daily Deals vs. The Coupon? The Winner Is ...
NEW YORK ( MainStreet) -- What's better for your business, a daily deal or a coupon?
The answer, of course, depends. What type of business are you promoting? Is it a start-up? A seasoned restaurant? Are you selling services or products? These are all questions a business owner must take into account when deciding the best way to get customers.
Some experts say neither, by the way.
"They both deteriorate and discount your brand in the short- and long-term. There are much better ways of trying to build traffic, such as loyalty programs , community involvement, creating ambassadors of your customers to tell your story and to do a better job of telling your story on the Web," says Tom Kelley, principal at AccessPoint Media Group . Kelley specializes in brand building for small businesses and start-ups, mainly in the restaurant and hospitality industry.
"Coupon and daily deals do nothing but create an environment of coupon clippers and folks looking to find the next best and cheapest lunch. That doesn't build loyalty. It actually demonstrates to the customers and your guests that your
In the most general sense, a daily deal is a typically a heavily discounted voucher prepaid for by consumers, while a coupon is used at the point of sale, says Kara Nortman, senior vice president of consumer businesses at CityGrid Media , parent company of Citysearch and Urbanspoon. CityGrid connects small businesses to customers by aggregating content for that business, which is then pushed out via mobile apps and Web sites where consumers will find them.
On the one hand, the so-called Groupon(GRPN) effect has created a cadre of consumers eager to find deals online to interact with merchants offline.
Daily deals from the likes of Groupon and LivingSocial "have a much stronger commitment vehicle," whereas coupons are a more gentle form of engagement, Nortman says.
"Groupon provides a suite of local marketing tools that finally address classic small-business concerns, from new customer acquisition to retention to yield management. There is no more effective toolkit available to merchants today," says Julie Mossler, a Groupon spokeswoman.
Daily deal sites take a percentage of the revenue made from each deal sold to consumers. But with that commitment comes execution challenges. Business owners need to take a hard look at their margins and operations to see if they can handle the -- likely temporary -- increase in business a deal voucher offers.
"In every market we serve we have a team of on-the-ground experts who know the local market and can sit down with a merchant and discuss recommendations for what type of promotion will work best for them. During our face-to-face meetings we'll work with a merchant to craft a tailored promotion that showcases their best offerings and helps move their business forward," a LivingSocial spokeswoman says.