Daily deal sites have been making headlines as of late, and it isn't for positive reasons. Not only is the share price of Groupon sliding downward, but consumers are growing tired of the sites and are not buying as much as they were beforehand. As a result, many small business owners are questioning if featuring these sites are worth it, according to Fox Business.
A recent survey conducted by Utpal Dholakia of Rice University's Jones Graduate School of Business found only 20 percent of deal users come back to the store after their initial purchase. The highest success rate was found among photographers, education-related services and health and fitness, the media outlet reports. However, cleaning services, restaurants and retailers are not doing as well.
"Daily deal sites are a double-edged sword, and unless they are structured properly, they’re likely to produce more harm than good," Charles Gaudet, CEO of PredictableProfits.com, a small business marketing site, told the news source. "It’s important to realize that the daily deal customer purchased a coupon for your business based upon the price of the product, not because they have an intention to continue doing business with you. Once the daily deal customer redeems the coupon, it’s now the business owner’s job to convert them into a repeat purchaser and a lifetime buyer."
However, there are some positives that could diminish some of the small business challenges. These daily deal sites do get a new business out there and offer a deal that could spread the word and attract customers, but it depends on how the business uses these sites, the news outlet reports.
Time shared some tips for small businesses considering selling deals on these sites. First of all, it is important to find a good site that will point a business in the direction of the right customers. Companies should also think about capping sales at a certain point, so discounted sales do not take up more than owners can afford. Finally - and possibly the most important - businesses should find a way to get the customer to return such as offering coupons which encourage repeat visits to keep the clients coming back for more.