Deal Or No Deal?

Beautiful woman doing shopping
Yipit promotion for yogurt

 

Is it worth it? Well, you’ve gotten people through the door. Some may buy a full-price salad to go with that sandwich. Some may become regulars, or recommend your place to a friend. If a coupon encourages enough customers to buy more or to return, then the coupon is ultimately worth it. If not, the business suffers.

There are no guarantees, and the research is ambivalent. A survey of businesses by the Social Science Research Network (SSRN)  found that almost 80 percent of their coupon users were new customers, and 20 percent of those customers returned after trying it.

This sounds promising. But the same survey also found that 60 percent of the deal-seekers did not spend any more than the amount allotted by the coupon.

Another study, by CM Copywriters, found that 78 percent of the owners of participating businesses thought their coupon customers were more price-sensitive than their usual customers. And 82 percent  were not satisfied with the number of return visits they got from the new customers.

In other words, it got bargain-hunters in the door, not new “regulars.”

The biggest questions got mixed results:

The CM study found that 45 percent of businesses would post another deal, and 49 percent would not.

The SSRN study found that 55 percent of businesses made money from the deal coupon, while 18 percent broke even, and 25 percent lost money.

The take-away from these studies: Daily deals are risky business. If you decide to give it a try, maximize your chances of success by being prepared.

Expect an invasion. Posting a coupon is supposed to bring in a flood of customers, so make sure you have the staff and product to cope. You won’t impress new customers or please your regulars with long lines, poor service or sold-out goods.

So prepare for the worst. You might get the best out of the deal.

 

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