With discount deal sites on the rise, it’s timely to learn the lessons of successful (and unsuccessful) deal promotions.
My first task at work every morning is to Tweet daily deals for a client. Every morning. (Although I took Christmas Day off). Known as ‘group buying’ or ‘social commerce’, this recent retail phenomenon is built on the back of social media. A business offers a heavily discounted product or service, such as a massage. The social commerce site runs the promotion through email, Facebook and Twitter and takes a cut of sales. The massage centre gets an influx of new business and an injection of cash.

I’ve seen up close how well it works, or doesn’t, and spent a lot of cash on my clients’ and other deals’ sites. The lessons and pitfalls of social commerce are similar to other types of promotions.

1.      Know your costs
Your break-even point should never be compromised unless you are absolutely sure that the value of a bigger database is worth it. My friend bought a 20-pack of one-to-one personal training sessions for $20 meaning the trainer worked for $1 an hour. A 9.30am yoga class involves fixed costs - electricity, rent, water and teacher fees - regardless of whether you have two students or 20. But a class with 20 looks far more appealing than one with two.

2.      Know your capabilities
The personal trainer thought he’d sell about 30 20-pack training sessions but instead sold 395. Not only did he struggle to make a livable wage but had trouble keeping up with demand. Be ready to cope with a massive influx of business – and a lot of calls.

3.      Ensure you website wows
This is an online arena so your website needs to perform. The potential buyer visits the deals’ site and then clicks through to your website to check it looks professional, reputable and appealing. A lousy-looking site is a lost deal.

4.      Make people feel special
You and your staff need to be as fresh, enthusiastic and welcoming of discount customers as you are with full fee-paying loyal, long-term custom. My experience at a high-end Sydney hotel where I had a discounted massage was so good that I returned for dinner and recommend them to friends and out-of-towners.

5.      Collect details
Definitely collect your new customers’ details, but consider how unappealing a long form looks and take only what’s necessary. And that includes an email address.

6.      Give them reasons to return
Many businesses are now offering incentives following the deal, such as $10 off or 10% off your next visit. If too many of your new customers aren’t returning to redeem these, you have a problem.

7.      Don’t do the hard sell
My friend and I sat through a hard sell before a spa treatment (a further $50 for some special serum) and a hard sell at the end (several skincare products). We were both annoyed and won’t go back. Your soft sell includes attitude, skills, quality and knowledge as well as convenience to the customer.

8.      Follow up
Don’t just add your new contacts to your database and start emailing them. Give them a call or send them a personalised email mentioning the product or service they used. Ask for feedback, invite them to events or courses, suggest related products and invite them to participate in your online communities on Facebook and Twitter.

Happy deals!

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