Don’t Count Out Daily Deals

These days, it seems that it’s de rigueur to predict the demise of the “daily deal.” Yet despite the spate of dire news reports — from the closure of Facebook’s local deals offering after four short months to Groupon’s IPO woes — the days of group sales and flash sales are far from over.

When Experian Hitwise compared traffic in August 2011 to August 2010, U.S. visits to group-buying sites were up 163 percent. Similarly, visits to flash-sales sites were up 109 percent in July compared to the same month in 2010. While we may not see the staggering number of players that exist today (currently 685 and growing), there are always going to be consumers that love a deal, especially in a still-struggling economy. But a crowded field means that dealmakers do need to evolve (and fast!) to maintain momentum.

From a recent study on the daily deals business, we learned a lot about what’s working for — advertisers who need to get offers out, and fickle subscribers who want valued messages (i.e., not junk) — is no easy task. And because email is the primary driver of daily deal sales, everything from the length of your subject line to the time of day your offer is delivered can have a big impact on whether or not you “close the deal.”
Based on observing the best practices of some of the top players in this arena, we’ve managed to gather some rules of thumb for daily deal success. For one, you need to get to know your subscribers. You may have heard that the relevance of your offer is really important. Even a 95 percent discount on scuba lessons is meaningless to a person who doesn’t swim, after all. But how can deal-providers effectively determine just what is and is not relevant to their subscribers? Capturing and analyzing subscriber data is essential.
In the data-capture department, one thing that Groupon does really well is its welcome message. In it, the company immediately gives new subscribers the opportunity to provide preference information on the deals they’d like to see most, and to let Groupon know what companies they’d like to see deals from. Instead of talking “at” subscribers, Groupon is giving them a voice and establishing a two-way communication. In this way, the company can learn something that helps it make its offers more relevant.
Besides getting to know your customers, the best deal vendors know how to prioritize within their database of subscribers. Keep in mind, however, that not all learning is equal. Analyzing behavioral information collected about what a subscriber clicked on or has bought in the past is definitely useful, but sometimes it can lead marketers astray. A one-time purchase of cupcakes for a friend’s birthday doesn’t mean a consumer wants a constant barrage of offers from every bakery in town.
When a subscriber is provided an opportunity to tell you herself that she likes designer shoes, contemporary furniture and gardening, that’s incredibly useful. Self-reported data from subscribers on their interests and preferences should therefore be weighted more heavily than behavioral information.
In addition to knowing your customers well, timing is crucial in the deals space. For example, successful flash-sale provider HauteLook leverages burst-email delivery to ensure that every message to its millions of subscribers arrives within the same 10-minute window every day. This enables them to emulate the experience of an offline-sample sale, where women line up at the crack of dawn to get the best pick of the inventory.
When a company can say that its subscribers are actively looking forward to opening an email offer, it’s safe to assume that online marketing has come a long way since the creation of the word “spam.” To make an offer feel less like junk that’s clogging up a person’s inbox, consistent timing can create a sense of immediacy and urgency among subscribers that dramatically increases open rates, clicks and ultimately revenue.
Lastly, our advice is to keep it simple. People don’t read email, they scan it, especially when it comes to marketing offers. You have about three to seven seconds to convey your message before the recipient checks out, so keeping things catchy and to the point is critical.
Here’s a bad example: one particular flash-sale company has recently taken to using the subject line to list every brand name label included in the offer. This was surely overwhelming to most recipients.
Clarity is essential. Better to compose subject lines as if you were writing for a billboard on the expressway. The reader (or perhaps we should say, the scanner) should be able to immediately get the meaning. In the main message text, consider how spacing, bullets and headlines draw attention to the most relevant (there’s that word again!) aspects of your offer. Prominent display of the price and discount percentage of the offer brings the value of the deal front and center, for instance. Consolidate similar or complementary content within the same message. And resist the urge to use large chunks of copy as this can deter consumers from engaging further.
The daily deal business is still growing, but in an increasingly crowded market, deal providers will need to evolve to stand out from the pack. As such, it is imperative to leverage email marketing as effectively as possible to drive sales and build subscriber loyalty. Don’t let your engagement strategies become fossilized.
Kara Trivunovic is senior director of strategic services at StrongMail, a provider of email marketing and social media services.

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