Gannett is an enormous company with over 30,000 employees managing scores of properties that include hundreds of national and local Web sites, print publications, marketing consultancies, a careers site, not to mention a little thing called USA Today. It’s the typical corporate megalith trying to hold onto customers from the old world as they lurch headlong toward the future, simultaneously ramping up some divisions while laying off hundreds elsewhere.
So despite all these similar entities, in the opaque logic of silo’d corporate media it probably makes perfect sense that Gannett would hatch another one — and one that happens to be at the white-hot center of the “Internet Controversy Du Jour”: daily deals.
Deal Chicken was launched last fall with little fanfare and in just one market, Phoenix, after several women from Gannett’s Republic Media — The Arizona Republic and azcentral.com — were “charged with dreaming up a new product that would appeal to them,” according to the site’s marketing. “Several meetings later, Republic Media had a new idea and a fun new name that had nothing to do with the newspaper but had everything to do with promoting local businesses and getting great deals for Valley residents.”
And now Deal Chicken is set to expand, with a recent announcement of growth into another Gannett market, Louisville, and many more chicks ready to hatch in the coming months.
“What makes our offering unique is our long-established local presence and our ability to leverage Gannett’s local media properties,” said Gannett communications VP Robin Pence.
According to paidcontent.org, Gannett CEO Craig Dubow recently told investors during their earnings call that the social media deals programs aren’t just for Gannett’s 80 community newspapers. The plan also calls for greater matching of hyperlocal community efforts tied to its TV broadcast stations as part of Gannett’s rebranding campaign emphasizing itself as a traditional media company with a digital core.
A somewhat locally diverse digital core at that: Gannett also runs GannettLocal, a “startup” begun just over a year ago to provide marketing tools for local companies; DoubleTake, another Groupon-y experiment; and Shop Local, a coupon and deals site they’ve apparently not connected to other local shopping deals.
As for Deal Chicken, it seems Gannett has the flock finally on the move. According to communications VP Robin Pence of Gannett: “What makes our offering unique is our long-established local presence and our ability to leverage Gannett’s local media properties,” she said in a prepped statement for the paper.
The site indicates that, following Louisville, Ky. in August, at least 57 other cities are on the docket for launch, from Sioux Falls, S.D., to Fort Myers, Fla.
So are we really just looking at yet another daily deals site only this time with the backing of a media behemoth? GannettLocal’s blog looked at it this way upon launch:
Deal Chicken is a website that offers daily deals to consumers who make a “group purchase” of a product or service for a highly discounted rate, often at 50% or more off the regular price. There is a limited time to make the purchase, and if a specific quantity of the offer is not sold the deal will not be valid. If, however, the quantity is reached, customers are then emailed a link to print a coupon to redeem for the service they have purchased.
While it can be a great way to introduce potential new customers to your business, Deal Chicken isn’t likely to be an immediate money-making venture.
If you participate in this type of deal, it is common for the service to keep around 50% of the revenue generated by the deal. This means that, between the initial discount of the service and the small amount of revenue received from the up-front customer payment for the deal, the financial return to the business is not great.
Where businesses tend to make their money on deals like this is in repeat business from participants. Because of this, it’s important to make a positive first impression on those customers when they redeem their Deal Chicken coupon.
These daily deals can be used by many types of businesses, but seem to most commonly feature restaurants, salons and spas, health clubs, masseuses, and other service-based local businesses.
Here are a few things to consider before signing up to participate in a Deal Chicken deal:
– Will the deep discount have a negative impact on the brand image you are trying to build?
– Is the potential customer brought in by this type of deal within your target market?
– Do you have a strategy in place to encourage repeat business?
– What restrictions (ie. Quantity sold, expiration date, redemption limits) would you need to set so the deal doesn’t get out of hand?
Perhaps prescient on Wendy Conebeer’s part, the blogger behind the post. She points to — rather innocently, upon looking back — what has become something of a firestorm lately around the true value of daily deals. Particularly the parts about developing a plan for repeat customers. The naysayers today essentially claim these deals are great for value hunters looking to get something worth $20 for $10, with no intention of ever returning to buy full price. Is this where the whole daily deals market falls on its face, drawing blood from innocent local businesses on its way down? Time will tell. I’m too chicken to predict.
Rick Robinson’s Turf Talk column appears every Wednesday.