Businesses have lined up to offer their services at cut rate pricing, riding the bandwagon of deal-offering through services such as Groupon and Facebook Deals. Several Smallbox clients have used discounting services - sometimes we advise against deep price cuts, while other times it could be a good fit.
Whether it's right for you or not, there are a few shifts in the deal market worth noting.
Taking deals into your own hands
Haute in the Heartland had a great write up testing Gap's new site, gapmyprice.com. Why give more than half of an already significantly reduced profit, when you can create your own site and broker deals yourself? Why offer an item for 50% off if a customer is satisfied with a 15% discount? Limited products and uneven deals (as noted by Gabrielle) might not make for the best success in this case, but the idea is a solid start.
A newly launched subsidiary GrouponNow, only available in Chicago for now, allows vetted business owners to offer on-the-spot deals to react to real-time business trends. Users of their smart phone can view nearby deals on an app. Have a product you want to move? Are Tuesdays a notoriously slow business for you?
A Real Life Example: Once I visited a bakery at the end of the day. After I made my purchase they offered me a whole blueberry pie for free (best day ever!). Instead of giving up all earning potential, the on-the-spot deal allows the business to at least recoup the costs of ingredients and labor. The bakery, for example, could offer half-price pies in the last thirty minutes of business and likely never throw out or give away another pie again.
TIPS: Run your own deal of the day (or week) promotions. Email marketing is a great way to deliver a message like this without investing in a whole micro-site or divide your profit with a deal platform. Using a limited time offer like one day or week increases sense of urgency.
What otherwise might not have sold
National concert promoter Live Nation just announced a new partnership with Groupon, called GrouponLive. Live Nation hopes to reach new customers and move unsold concert tickets for one of its more than 20,000 annual events through last minute deals.
This will be an interesting trend to watch. After hearing many reports of business losing more than gaining through Groupon's original model, discounting remnants might offer a more sensible path to new business.
A Real Life Example: In my volunteer work with Indy Film Fest, we used Groupon to sell tickets for the 2010 film festival to great success. We got feedback from first time visitors that it took the risk out of trying the festival and since we had a great capacity of seating and no hard cost involved, there was nothing to lose.
TIPS: Consider your costs and supply to help determine how low you can go. The real time nature of social media is a great way to communicate late minute deals in a more informal manner than using a paid promotion platform.
What do you think? Do you have any DIY deals ideas to share?