Study: Positive Daily Deal Experiences Don't Ensure Repeat Business | Street Fight

Study: Positive Daily Deal Experiences Don’t Ensure Repeat Business

Study: Positive Daily Deal Experiences Don’t Ensure Repeat Business

A new study of why consumers use daily deals paints a pleasant picture for local merchants looking to get new customers in the door — but it remains to be seen if they can get those customers to keep coming back.

The study, conducted by digital SMB marketer Constant Contact and research firm Chadwick Martin Bailey, concludes that more than one-third of consumers are more eager to buy deals from local, small-to-medium sized business as opposed to big, national brands. But for 58 percent of the study’s 1,433 respondents, even a positive deals experience does not automatically equate to customer loyalty.

“The true value of running a deal for a small business is bringing in new, repeat customers, not one-time deal seekers,” said Dave Gilbertson, general manager of Constant Contact’s local deals platform SaveLocal, in a press release, citing some deals vendors’ unwillingness to distribute subscriber contact information to merchants as a reason for few return customers. “Without the tools to follow up, unfortunately, that’s what many of them become.”

Otherwise, the study’s findings, though not overly surprising, should be taken positively for daily deal providers. Almost 80 percent of the deal subscribers polled said they’ve purchased at least one deal in the past six months, with 27 percent of that chunk buying five or more. And 92 percent of deal users said they think daily deals, at least locally, are here to stay.

Consumers, the study finds, are also willing to share deals, with word-of-mouth among family and friends being the top reason — 50 percent — why locals buy deals from an unfamiliar business.

From a consumer perspective, a Groupon or LivingSocial deal voucher generally fetches at least 50 percent off any purchase. Merchants, though, have the leverage to decide whether to run deals, and appeasing one-time, coupon-hungry consumers at around 25 percent normal value is not a sustainable, long-term business model.

Other conclusions from the study include:

  • Consumers, especially women (35 percent), are more likely to buy a deal if it’s recommended by someone they know.
  • Customers will share deals if they’re “great” (54 percent), regardless if they’re a current customer of merchant.
  • More than twice as many consumers (55 percent) share deals via email than social networks.
  • Deals for restaurants (65 percent) and entertainment (48 percent) are the most commonly shared.
  • A clear majority of consumers think deals help attract new customers to local businesses.

Patrick Duprey is an intern at Street Fight. 

4 thoughts on “Study: Positive Daily Deal Experiences Don’t Ensure Repeat Business

  1. I’m confused of the role of the daily deal industry is it to get new customers in the door and help the merchant grow their business or is it to supply a steady stream of repeat customers and revenue.  If running a single daily deal was the savior of an industry that has a 90% fail rate, Groupon would be opening up eateries.  When someone comes to your place of business are you not asking them to friend you on facebook or getting their contact information.   This is akin to joining a gym and going once and realizing you are not an Olympic Athlete and then blaming the gym.  Local Merchants spend thousands a month on traditional media with little tracking recognition, but a DD offer brings 500 in the door and somehow…

  2. There has to a balance, the above research is spot on when it comments that just a great experience isn’t enough to create a loyal customer. However, I would argue that it is a necessary first step. If the customer doesn’t have a good experience then they are never going to return regardless of re-marketing efforts. Merchants need to collect as much data about the customer as possible for after the deal and do everything in their power to improve the customer’s deal experience (not treat them as second class customers) during the deal. To do that merchants need; easy to setup and easy to use tools that make it possible for them to run a successful deal without effecting their core business. If the merchant can give the customer a memorable experience and has collected valid contact details about each customers then they are not only now armed to re-market, but are also in good standing with the customer who will better appreciate hearing from the merchant again. 
    Daily deals are a marketing campaign (albeit a ‘hands-on-product’ campaign) first and foremost, and should be treated as such. No stand alone marketing campaign creates a repeat/loyal customer and daily deals are no different. A marketing campaign that is a customer’s first touch-point with a business is the foundation of a relationship that needs to be nurtured and built upon. 
    I can’t stress enough that merchants need tools that help with all aspects of this, tools that help them improve the deal experience up to the point the customer walks in the door, and also tools that help them best re-market to those customer after the customer leave (fully satisfied).

  3. This is a great article in line with experience we have had with our customers. Merchants must understand that a daily deal must complement other marketing tools and campaigns. The daily deals drive customers to the store, it’s up to you to make sure they have an easy way of coming back. That means you have to capture their contact info and keep them informed after the deal is over. Failure to capture even their emails is bad business because then you’re losing 100% of information which could have been easily captured.

    It’s important to make the experience simple for customers, ask them for an email or ask them to like you on Facebook. Social media is great for engaging with the new customers long after the deal is done. You can’t expect the customer to want to return if you don’t keep in contact first. Unless the experience they had was absolutely amazing, it’s possible that they may have even forgotten your businesses’ name if you never remain engaged with them. 

    Furthermore, positive experiences rarely equate to automatic loyalty, and running a good daily deal will rarely guarantee loyalty. Loyalty is a complex and it’s important to build an emotional relationship with the customer beyond simply provided good food for a small price. Using social media to engage is important. Having a good website that is easy to use and is welcoming helps craft a memorable impression. Also, having good SEO is important because if they don’t remember your name, it should still be easy for them to find you again in the future. 

    Like @ecf97dfdcd247607036b7a7c5bd23e22:disqus and @ef7d28e078d4debd863a4e6809b1f0d3:disqus  mentioned, daily deals are only one tool in the marketing arsenal, and it’s important to run a great business that handles other marketing campaigns well. If not, work with an agency that does that; but don’t start believing that running a good daily deal will ever give a business automatic loyalty.

    (
    <a href=”http://www.xvio.com” title=”XVIO” customer acquisition and retention agency that specializes in daily deals, reputation management, SEO, and social media)

  4. This is a great article in line with experience we have had with our customers. Merchants must understand that a daily deal must complement other marketing tools and campaigns. The daily deals drive customers to the store, it’s up to you to make sure they have an easy way of coming back. That means you have to capture their contact info and keep them informed after the deal is over. Failure to capture even their emails is bad business because then you’re losing 100% of information which could have been easily captured.
    It’s important to make the experience simple for customers, ask them for an email or ask them to like you on Facebook. Social media is great for engaging with the new customers long after the deal is done. You can’t expect the customer to want to return if you don’t keep in contact first. Unless the experience they had was absolutely amazing, it’s possible that they may have even forgotten your businesses’ name if you never remain engaged with them. 

    Furthermore, positive experiences rarely equate to automatic loyalty, and running a good daily deal will rarely guarantee loyalty. Loyalty is a complex and it’s important to build an emotional relationship with the customer beyond simply provided good food for a small price. Using social media to engage is important. Having a good website that is easy to use and is welcoming helps craft a memorable impression. Also, having good SEO is important because if they don’t remember your name, it should still be easy for them to find you again in the future. 

    Like the other commenters  mentioned, daily deals are only one tool in the marketing arsenal, and it’s important to run a great business that handles other marketing campaigns well. If not, work with an agency that does that; but don’t start believing that running a good daily deal will ever give a business automatic loyalty.

    (XVIO is an agency specializing in daily deals, SEO, and social media. Find more at http://xvio.com)

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4 thoughts on “Study: Positive Daily Deal Experiences Don’t Ensure Repeat Business

  1. I’m confused of the role of the daily deal industry is it to get new customers in the door and help the merchant grow their business or is it to supply a steady stream of repeat customers and revenue.  If running a single daily deal was the savior of an industry that has a 90% fail rate, Groupon would be opening up eateries.  When someone comes to your place of business are you not asking them to friend you on facebook or getting their contact information.   This is akin to joining a gym and going once and realizing you are not an Olympic Athlete and then blaming the gym.  Local Merchants spend thousands a month on traditional media with little tracking recognition, but a DD offer brings 500 in the door and somehow…

  2. There has to a balance, the above research is spot on when it comments that just a great experience isn’t enough to create a loyal customer. However, I would argue that it is a necessary first step. If the customer doesn’t have a good experience then they are never going to return regardless of re-marketing efforts. Merchants need to collect as much data about the customer as possible for after the deal and do everything in their power to improve the customer’s deal experience (not treat them as second class customers) during the deal. To do that merchants need; easy to setup and easy to use tools that make it possible for them to run a successful deal without effecting their core business. If the merchant can give the customer a memorable experience and has collected valid contact details about each customers then they are not only now armed to re-market, but are also in good standing with the customer who will better appreciate hearing from the merchant again. 
    Daily deals are a marketing campaign (albeit a ‘hands-on-product’ campaign) first and foremost, and should be treated as such. No stand alone marketing campaign creates a repeat/loyal customer and daily deals are no different. A marketing campaign that is a customer’s first touch-point with a business is the foundation of a relationship that needs to be nurtured and built upon. 
    I can’t stress enough that merchants need tools that help with all aspects of this, tools that help them improve the deal experience up to the point the customer walks in the door, and also tools that help them best re-market to those customer after the customer leave (fully satisfied).

  3. This is a great article in line with experience we have had with our customers. Merchants must understand that a daily deal must complement other marketing tools and campaigns. The daily deals drive customers to the store, it’s up to you to make sure they have an easy way of coming back. That means you have to capture their contact info and keep them informed after the deal is over. Failure to capture even their emails is bad business because then you’re losing 100% of information which could have been easily captured.

    It’s important to make the experience simple for customers, ask them for an email or ask them to like you on Facebook. Social media is great for engaging with the new customers long after the deal is done. You can’t expect the customer to want to return if you don’t keep in contact first. Unless the experience they had was absolutely amazing, it’s possible that they may have even forgotten your businesses’ name if you never remain engaged with them. 

    Furthermore, positive experiences rarely equate to automatic loyalty, and running a good daily deal will rarely guarantee loyalty. Loyalty is a complex and it’s important to build an emotional relationship with the customer beyond simply provided good food for a small price. Using social media to engage is important. Having a good website that is easy to use and is welcoming helps craft a memorable impression. Also, having good SEO is important because if they don’t remember your name, it should still be easy for them to find you again in the future. 

    Like @ecf97dfdcd247607036b7a7c5bd23e22:disqus and @ef7d28e078d4debd863a4e6809b1f0d3:disqus  mentioned, daily deals are only one tool in the marketing arsenal, and it’s important to run a great business that handles other marketing campaigns well. If not, work with an agency that does that; but don’t start believing that running a good daily deal will ever give a business automatic loyalty.

    (
    <a href=”http://www.xvio.com” title=”XVIO” customer acquisition and retention agency that specializes in daily deals, reputation management, SEO, and social media)

  4. This is a great article in line with experience we have had with our customers. Merchants must understand that a daily deal must complement other marketing tools and campaigns. The daily deals drive customers to the store, it’s up to you to make sure they have an easy way of coming back. That means you have to capture their contact info and keep them informed after the deal is over. Failure to capture even their emails is bad business because then you’re losing 100% of information which could have been easily captured.
    It’s important to make the experience simple for customers, ask them for an email or ask them to like you on Facebook. Social media is great for engaging with the new customers long after the deal is done. You can’t expect the customer to want to return if you don’t keep in contact first. Unless the experience they had was absolutely amazing, it’s possible that they may have even forgotten your businesses’ name if you never remain engaged with them. 

    Furthermore, positive experiences rarely equate to automatic loyalty, and running a good daily deal will rarely guarantee loyalty. Loyalty is a complex and it’s important to build an emotional relationship with the customer beyond simply provided good food for a small price. Using social media to engage is important. Having a good website that is easy to use and is welcoming helps craft a memorable impression. Also, having good SEO is important because if they don’t remember your name, it should still be easy for them to find you again in the future. 

    Like the other commenters  mentioned, daily deals are only one tool in the marketing arsenal, and it’s important to run a great business that handles other marketing campaigns well. If not, work with an agency that does that; but don’t start believing that running a good daily deal will ever give a business automatic loyalty.

    (XVIO is an agency specializing in daily deals, SEO, and social media. Find more at http://xvio.com)

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