Many small- to mid-size businesses have been intrigued by the promise of increased sales that can accompany participation in one of the various "daily deal" websites that have popped up across the US. These popular deal subscription sites offer consumers impressive limited-time-only with local merchants. Their popularity has been driven by local businesses eager to drive volume during these difficult economic times and by consumers looking for major discounts.
But are these opportunities all they're cracked up to be for small- to mid-sized companies?
It depends. For local businesses that enter into these opportunities with realistic expectations, they can unquestionably generate increased results over the short- and long term. Local companies who decide to participate in these daily deal agreements have to grasp that the retention rate generated with such deal-seeking customers is actually quite low; price-sensitive shoppers flit from seller to vendor based on price, not a sense of loyalty. That said , these daily deal providers can indeed drive short term sales and could well lead to potential referral business... if done correctly.
The key to deciding whether or not participation in one of these daily deal opportunities is smart for your small business is to have a good understanding of three critical success factors: your business goals, your financial margins, and your propensity for strong customer service.
Smaller businesses wanting to take advantage of the immediate boost in volume that these daily deal opportunities offer have to do so purposefully. It's not enough to simply want to drive volume. To get the best from these opportunities, companies need to contemplate ways to up-sell and cross-sell their products and services, add to their mailing lists, and ask for repeat and referral business. Without addressing these opportunities via a clear-cut action plan, small- and medium-sized firms will experience sub-optimal results.
Because these price deductions cut into a company's margins significantly, and because a fee must be paid to the daily deal website organization, it's important that a business understands the financial consequences of participating in such programs. Time after time, the small businesses that take part in these sorts of programs don't foresee the rush of customers generated by these daily deals. They don't have the infrastructure to deal with the rise in demand. The result? Intense stress on existing systems and the delivery of poor customer service. When this happens, a small- to medium sized business undercuts itself altogether. Once consumers receive poor customer service, they will not come back with repeat business, nor will they generate the rewarding referral business opportunities that can come in at non-discounted rates.
To ease the tension on customer service, a business can do two things. The 1st is to acknowledge the short-term increase in volume may demand increased staffing. At the very least, many businesses will need extra help at the office for handling all of the inbound business and in scheduling appointments. Second, companies should also realize that they can generally experience a last minute rush as the end of the deal period approaches. Due to this, it's not only wise to expect last minute staffing needs but to also have a plan in place to extend the expiration date of the deal as necessary in order to provide the all-important positive customer service experience.
For the right sorts of business, daily deal subscription websites can provide a bump in volume during slow periods and some repeat and referral business over the long term. You can take full advantage of these opportunities by conscientiously evaluating your company's financial picture, infrastructure, and capability to deliver top quality customer service.
But are these opportunities all they're cracked up to be for small- to mid-sized companies?
It depends. For local businesses that enter into these opportunities with realistic expectations, they can unquestionably generate increased results over the short- and long term. Local companies who decide to participate in these daily deal agreements have to grasp that the retention rate generated with such deal-seeking customers is actually quite low; price-sensitive shoppers flit from seller to vendor based on price, not a sense of loyalty. That said , these daily deal providers can indeed drive short term sales and could well lead to potential referral business... if done correctly.
The key to deciding whether or not participation in one of these daily deal opportunities is smart for your small business is to have a good understanding of three critical success factors: your business goals, your financial margins, and your propensity for strong customer service.
Smaller businesses wanting to take advantage of the immediate boost in volume that these daily deal opportunities offer have to do so purposefully. It's not enough to simply want to drive volume. To get the best from these opportunities, companies need to contemplate ways to up-sell and cross-sell their products and services, add to their mailing lists, and ask for repeat and referral business. Without addressing these opportunities via a clear-cut action plan, small- and medium-sized firms will experience sub-optimal results.
Because these price deductions cut into a company's margins significantly, and because a fee must be paid to the daily deal website organization, it's important that a business understands the financial consequences of participating in such programs. Time after time, the small businesses that take part in these sorts of programs don't foresee the rush of customers generated by these daily deals. They don't have the infrastructure to deal with the rise in demand. The result? Intense stress on existing systems and the delivery of poor customer service. When this happens, a small- to medium sized business undercuts itself altogether. Once consumers receive poor customer service, they will not come back with repeat business, nor will they generate the rewarding referral business opportunities that can come in at non-discounted rates.
To ease the tension on customer service, a business can do two things. The 1st is to acknowledge the short-term increase in volume may demand increased staffing. At the very least, many businesses will need extra help at the office for handling all of the inbound business and in scheduling appointments. Second, companies should also realize that they can generally experience a last minute rush as the end of the deal period approaches. Due to this, it's not only wise to expect last minute staffing needs but to also have a plan in place to extend the expiration date of the deal as necessary in order to provide the all-important positive customer service experience.
For the right sorts of business, daily deal subscription websites can provide a bump in volume during slow periods and some repeat and referral business over the long term. You can take full advantage of these opportunities by conscientiously evaluating your company's financial picture, infrastructure, and capability to deliver top quality customer service.
About the Author:
Marie Elwood runs Increased Results, an Atlanta-based consulting firm that helps large companies with marketing brainstorming sessions and Christian focus groups.
No comments:
Post a Comment