I received an interesting response from my earlier blog post introducing my Daily Deal Triangle. The Triangle demonstrates the three components to any Daily Deal: The Buyer, The Merchant and The Daily Deal Company. I argue the triangle must be balanced so each party benefits fairly.
I also argue that a few deal companies (Groupon, LivingSocial) have skewed the triangle in their favor, mostly on the backs of the merchants.
But some deal companies are building balanced triangles that serve all three parties. And that’s why I think merchants are getting the wrong idea about the daily deal opportunity based on the most visible problems of Groupon and LivingSocial. In other words, they’re missing the point.
Peter Whyte, COO of Screamin Daily Deals in San Juan Capistrano, CA, puts it succinctly:
“So, given the absence of risk on the merchant’s part, and real world discount, the merchant makes out like gang busters, especially if, as you say, the deal of the day company delivers geographically and demographically ‘relevant’ customers who have the highest potential for returning if they are satisfied with the initial experience.”
He nails it.
When a deal company can deliver well qualified, locally relevant new customers and they have loyalty/referral programs in place, the merchant can do very well with a daily deal promotion. Peter’s company is a great example of a daily deal offering that does a great job driving geographically and demographically relevant new customers into their merchants.
How about you? Are you a merchant with some feedback on the daily deal market? Leave me your comment below.
-Rob Rutkowski
(Want me to speak at your upcoming event? Give me the details and let’s make it happen.)
Related articles
- The Daily Deal Triangle and Why Everybody is Getting This Wrong (fierceselling.com)
- Are TownHog, Groupon and LivingSocial a good deal for merchants? (fierceselling.com)
- My interview with BIA Kelsey Group on Daily Deal companies (fierceselling.com)
- The Future of Daily Deal Sites like Groupon, LivingSocial and TownHog (fierceselling.com)
- All Grouped Out (revenews.com)
- What to expect when taking the group-buying plunge (theglobeandmail.com)
- Rumor Mill Spits Out Possible $25 Billion Valuation for Groupon (marketingpilgrim.com)
