Case Study: Running Deals With a Local Publisher

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When Renae Click decided to run a daily deal campaign earlier this year, she knew the publisher she chose would be important. That’s why Click, who owns Tomlinson’s Feed & Pets with her husband Scott, opted to work with a local hyperlocal publisher in Austin rather than a national company.

What types of daily deals have you run so far?
We’ve only done the one deal with 365 [365ThingsAustin]. I had a salesperson contact me regarding the possibility of doing the deal. I would only consider deal sites that target people who wish to shop at local Austin businesses like Tomlinson’s — so 365 was perfect for us.

How did you decide to go with a local publisher, versus one of the larger companies?
We are a local business and lucky to be in Austin, Texas, where consumers are very pro-local. In fact, [the popular local slogan] “Keep Austin weird” means support local business. 365 is a site for people to whom this concept is important. Buying local is a lifestyle, so it was the only way to go for us. We are not interested in attracting bargain-hunters who will come in for their deal and never return. We wanted to convert them into long-term, loyal customers.

How important was it for you to reach new customers?
It was extremely important to reach new customers. I sent the deal information out to our customers via the newsletter so that they would have the opportunity to participate, but we were really hoping to attract new folks from the 365 site. It is important to reach and win new customers, but perhaps more important to retain current customers – to change them from indifferent shoppers to avid fans. It’s our fans who promote our stores by word-of-mouth to other pet owners. That’s why we sent the deal to customers who had signed up for our newsletter – over 12,000 [subscribers]. We think that about half of the folks who purchased the [365ThingsAustin] deal were already customers and half were not because out of the 467 unique email addresses [we got], about half were already signed up to receive our newsletter.

How do you measure the success of a daily deal campaign?
I wish I had a system in place that could measure whether or not the new folks who bought the deal came back a second time. However, the only concrete way to measure the success of the campaign, I guess, is by the number of people who purchased the deal, how many people actually used their vouchers, and how much they spent on the shopping trip.

I’ve read that customers who bought your deal on 365ThingsAustin spent an average of 133 percent above their voucher value. How did that impact the bottom line, in terms of the success of the deal?
As best I can figure, we had 369 of the 594 vouchers redeemed. It is possible that that is not a 100 percent accurate figure because we have six stores, and we transferred used vouchers from each store to our main office, and it is possible that paperwork could have gotten lost, misplaced, eaten, or whatever. Of the 369, I was [only] able to track 314 because we failed to copy and retain sales information for the remaining vouchers. Those 314 spent an average of $25.55. That is after the $20 was deducted, but before taxes. Although some folks were determined to spend exactly $20 to the penny, we had a lot who spent well over the voucher amount. The profit from these sales paid for what Tippr retained from the deal.

What did you learn as a result of running your first offer?
A huge worry of mine before we did the deal was that some bozo would try to double, triple, or quadruple dip — make copies of their vouchers and use them at more than one location, since we have six stores in and around Austin. It is difficult with multiple locations and 45 employees to keep up with which vouchers have been used and which have not. I thought that would be a nightmare because we’ve had some folks get pretty creative with coupons [in the past]. However, we did not have one person try to reuse their voucher. It wasn’t an issue at all.

What have daily deals been able to offer your company that traditional advertising has not?
Every form of advertising doesn’t reach every type of consumer. Austin is very computer savvy and online, so we were hoping to reach those consumers who get their daily information from their computer rather than from the print media. We also hoped to drive folks to our Web site and Facebook page who found out about us due to the deal. As I said, with this particular deal site, we were able to target “shop local” friendly folks. Additionally, we added over 200 new email addresses to our newsletter database from the deal.

Click here to read more Street Fight local merchant case studies.

This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.