Groupon and Daily Deals - is this loyalty marketing?

Posted by Cathy Harms on Mon, Mar 18, 2013 @ 10:41 AM

I am a daily deal junkie.  I receive Groupon, LivingSocial, AmazonLocal and Crowd Cut every day.  The offers have become very similar and I tend to know exactly what I am interested in. I don't open the email unless the subject line hits the mark for me.  I bet I have purchased over 40 different offers including restaurants, spas, bowling, kayaking, window cleaning and even a few goods like a fun computer case.  In each case, I am in for the deal, but could be influenced to visit again.  But no one has ever attempted to get me to come back for another visit or to buy more.  I am absolutely amazed at the opportunity they are missing.  They are not even trying to see if I will become a loyal customer!

Restaurnat daily deals, loyalty, customer rewards

One of my favorite restaurants is Jensen's Supper Club in Eagan, MN.  The atmosphere is classic supper club, large round booths with dark wood, red and grey decor.  Their walleye is my favorite menu item.  Combine that with their house salad, popover and a great bottle of wine and it becomes a wonderful experience.  The service is great.  I have probably been there 30 times over the years.  Do they have a clue as to whom I am?  No, they don't.   They have been active with daily deals, so of course I am going to purchase those because I love the restaurant so much. Why not get what I love for a better price?

There are many reasons why businesses don't want to connect with their customers and the primary one is time.  The second one is cost.  They are willing to lose money on Groupons to drive traffic, but they don't see the real value of communicating to their customers to keep them loyal.  Just imagine how fast your customer list could grow if you combined the daily deal with a communication or loyalty marketing program.  Here are some stats I found interesting:

Who buys daily deals?

  • Frequent customers                 38%
  • New customers                        31%
  • Infrequent customers               27%
  • Former customers                     4%

ForeSee Research 2012 (Surveys completed Nov - Dec 2011)

How businesses fare with daily deals:

  • 55.5% made money
  • 26.6% lost money
  • 17.9% broke even
  • Only 19.9% deal buyers returned for full price purchase
  • 21.7% of deal buyers never redeem

Rice University Study by Utpal Dholaken, June 13, 2011

There are many more stats out there by vertical with restaurant having the lowest return on investment results.  No matter what business you are in, you can continue to connect with customers so that you can get them to come back again.  Daily deal junkies like me are influenced by email or text marketing even if the offer is not as great as the daily deal.  If I liked my experience, I will be interested in being communicated to.

The customer experience is the key to a successful daily deal promotion.  If you can show your best to every customer that comes in the door, then you will get more customers willing to give you their information so they can stay in touch with you.

As VP of Marketing at Tecmark - I am passionate about loyalty and making it as simple as possible for all businesses.  The power of communicating and rewarding customers will always deliver a greater return than any daily deal.  Check out Simpli if you are interested in a low cost, easy to use web-based marketing solution!


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 Cathy Harms, Tecmark, Simpli, Marketing  Cathy Harms, VP Marketing, Tecmark, 651.406.4444

Tags: Loyalty Marketing, Customer Experience