Group Buying Melissa de Andrade @MelissadAndrade The Daily Deal Phenomenon Check my Social Media blog: melissadeandrade.com.

Group Buying Melissa de Andrade

@MelissadAndrade

The Daily Deal

PhenomenonCheck my Social Media blog: melissadeandrade.com

What is a Daily Deal website?Sales tactic that uses

collective buying power

to offer

limited time discounts

that are valid only once

a certain number of

vouchers are soldVoucher Price

| Discount | How many

bought | Time left |

Rules |

** The more

customers

engage their

friends, the more

benefits they get

(including free

vouchers or even

more reduced

prices)

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INDUSTRYOversaturated The daily deal aggregator Yipit now sifts through 30,000 deals a month from some 650+ daily deal sites

Group buying is a strong business

But...

MERCHANTSNot always profitable56% of businesses made money from daily deal promotions, while the rest either lost money (27%) or broke even (18%)

CUSTOMERSMay be suffering from daily deal overkill, Groupon remorse or daily deal regret melissadeandrade.com

If group buying is oversaturated,

how to

differentiate?

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Personalization is the key!

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Focused on small, good brands for moms-$150 million in revenue expected this year-4 million members and 40,000 units sold from 700 different items a day

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Focused on deals for men- Bring relevant deals to subscribers- Bring audience that’s relevant to merchants

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What about the

merchant?

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Not Always Profitable for Merchants

75% off deal on a dozen cupcakes

Expected a few hundred orders

8,500 people took the deal

They lost thousands of dollars

Each sale meant a $4.50 loss

They had to pay $19,000 for extra staff and shipping charges for the 102,000 cupcakes.

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If group buying is not

for everybusiness, how should

one know?

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Group buying brings:

Big advertising boostIncrease visibility Exposure to many new customersA way to test a new product or service Extra inventory can be moved quickly.

Some hints to consider

Group buying can be part of your marketing strategy but it should not be ALL your marketing strategy

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Enhancing Groupon experience for the merchantChallenges Recommendations

Groupon does not build loyalty

Build loyalty yourself! - Build a unique experience for Groupon people- Use social! Motivate them to follow you on Twitter or like you on Facebook for further promotions- Use social! Ensure they provide positive feedback on social media tools. Group buying is a tremendous opportunity for positive ratings

Groupon buyers are bargain shoppers

Offer you own discounts!- Have an additional product with special price for Groupon people- Offer 50% off to bring in someone new (who will pay either full price or a slightly reduced price)

Groupon does not make financial sense

Evaluate and negotiate!- Think: Is Groupon for your business?- If so, use marketing budget to invest in group buying- Push daily deal services to accept a smaller cut of voucher sales- Shorten the redemption period, so that the business can plan carefully for the rush of new customers- Offer loyalty programs via text message, email, Twitter, Facebook

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Voucher Price | Discount | How many bought | Time left | Rules

Promote Deals yourself!

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ReferencesGroup Buying White Paper - Harvard Business Schoolshttp://www.slideshare.net/HackStartups/group-buying-white-paper

Considering Offering a Groupon? Read This First.http://socialmediatoday.com/jgibbard/337550/considering-offering-groupon-read-first

Group Buying: Key To Your Business's Social Media Strategyhttp://www.huffingtonpost.com/robert-ball/group-buying-is-key-to-yo_b_802560.html

Beyond Groupon: Daily Deals Evolve, New Competitors Emerge http://www.huffingtonpost.com/2011/11/23/groupon-daily-deals_n_1088436.html

Group Buying Versus Traditional Lead Generationhttp://www.huffingtonpost.com/robert-ball/group-buying-versus-tradi_b_813552.html

Retail Software: Your Groupon Advisor http://blog.softwareadvice.com/articles/retail/retail-software-your-groupon-advisor-1072911/

Pros and cons going Grouponhttp://socialmediatoday.com/caroline-jorgensen/379110/pros-and-cons-going-groupon

Groupon: winner or goat http://socialmediatoday.com/drewmclellan/263868/groupon-winner-or-goat

Google Offers vs Groupon vs Facebook Dealshttp://www.digitaltrends.com/social-media/google-offers-vs-groupon-vs-facebook-deals/

Will Groupon really boost your local businesshttp://www.socialmediaexaminer.com/will-groupon-really-boost-your-local-business/

Group buying local businesshttp://mashable.com/2011/01/20/group-buying-local-business

How daily deals are losing their allure for business and consumers alikehttp://moneyland.time.com/2011/08/30/how-daily-deals-are-losing-their-allure-for-businesses-and-consumers-alike

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