Such a Deal

November 15, 2012 | By: Sean Murray

You may have considered taking part in a “daily deal” program to increase sales at your small business. As always, you want to do your homework before jumping in. Lucky for you Constant Contact just published a post where they share information they gleaned as to “how and why” people use daily deals.

The research firm Chadwick Martin Bailey sent out a survey on behalf of Constant Contact asking 1,433 consumers over the age of 18 and came up with some pretty interesting results:

Consumers who sign up to receive daily deals end up purchasing them
Recommendations from friends make consumers more likely to purchase a deal from an unfamiliar small business
Personal endorsements drive deal purchases, especially for women
People are willing to share a deal if it’s great, regardless of whether they are a customer
More than 1/3 of consumers are more likely to buy a deal from a local small business
For nearly 60% of customers, even a good deal experience doesn’t automatically equal loyalty
More than twice as many consumers share deals via email than on social networks
Deals for restaurants and entertainment are the most commonly shared
92% of consumers think local deals are here to stay
Consumers think deals help attract new customers to local businesses

A lot of this information isn’t new. For example, the fact that women are more likely to make a purchase based on a “personal endorsement.” However, it should be noted that not too long ago that endorsement didn’t need to be “personal.” According to some statistics, an online recommendation from an unknown consumer was trusted by 70% of online consumers. However, what is of real interest to small business is the fact that this survey indicates at least one-third of those seeking online “daily deals” are more likely to buy something from an equally local small business (i.e. your small business.)

On the “not so great” side of the coin is knowing participating in daily deals isn’t a sure fire way to inspire customer loyalty. Again, this isn’t surprising. Think about it. Consumers who use daily deals are consumers who buy based on price. More than that, the fact that 60% state a daily deal doesn’t inspire loyalty indicates that it is likely that this 60% are consumers that always buy solely based on price. This means the minute your price isn’t the lowest they will skip town in a heartbeat. On the other hand, all is not lost. There’s that other 40% of daily dealers you should be following up on in ways that DO create customer loyalty. So daily deals do, in fact, provide an opportunity to create repeat business.

However, perhaps the most significant finding from this survey is that almost 100% of the people who sign up to receive daily deals purchase daily deals. Wouldn’t it be great if 92% of those you just sent emails translated into buying customers? This is a phenomenal statistic. Again, you can’t count on someone buying based on price to be loyal, but a mechanism this motivating to consumers represents an avenue to market to those who may otherwise not consider your local small business when making their buying decision.