Online Discount/Coupon Sites - Are They Good For Your Business?

If you listen to the national media, we are in severe economic crisis. This is the story they spread today and every day, year after year. So this instills fear, concern, and conservative spending habits after it is beat into our heads day after day across all mediums. Many people now use coupons that never have before and not out of necessity but because of the fear and concern that the economy could get worse.

In response to this online coupon sites are springing up and many consumers are getting awesome deals at restaurants, hotels, dental offices, horseback riding lessons, and many other categories that they otherwise would not have taken advantage of. But because of the lure of a DEEP, GREAT, DISCOUNT consumers are signing up for a daily email with information on the "Deal of the Day" and are sharing the deals with their friends and the viral explosion grows daily.

There are lots of opportunities for companies to get their message out to the masses with this type of program for FREE - or so they would have you believe. These programs can be a shot in the arm for a business or it could be the beginning of having to always discount their product or service. The typical program is that you (your company) offer your product or service at 50% or more off your normal price.

 Then they sell "vouchers" for $50 meal for only $25 and the $25 that the program collects then splits it 50/50 with your company effectively giving you 25% of what you would have normally gotten from a customer who found you on their own.

Seems like a good deal and it can be - for some companies. I have always been of the opinion that not all programs work for all businesses in every market. A careful evaluation of the program, their expectations and your expectations, is important before doing ANY program - discount or traditional advertising or online advertising.

Keep in mind these companies are selling what consumers perceive as a Gift Card. They are not interested in advertising or trying to sell a "voucher for $500 off your purchase of $1500 or more". They are not selling coupons they are selling gift cards. Selling the consumer a Voucher with rules and stipulations that they must spend more money to reap the benefit of what they have already purchased defeats the purpose of these programs.

Success is measured in many ways for different programs. It is important to understand how to track results for programs like Groupon, Living Social, Bargain Bee, Seize the Deal, I-Deals, etc. If you want new customers to come in for a special offer there are several key factors you need to consider:

1. Will this be a one time thing or are you planning to do this over and over?

2. Do you have the ability to "up-sell" once they come in to redeem the discounted offer? Is your staff trained to properly make this happen?

3. Do you have a goal or limit on how many discounts you want to issue?

4. Is the offer attractive but still valuable?

5. Will your portion of the money collected from the program cover your hard costs associated with the offer?

6. How much do you need to "up-sell" per redemption to make this a profitable program?

7. Will your staff properly track the program so you can see the real result of your participation?

There are many variables to any marketing or advertising program. Companies should plan out their strategy for the year and see where this could fit into their overall plan. If they don't have a plan, their business is down and this is a knee jerk reaction, they may get short term results but suffer in the long term because of not having a plan.

There is not one thing or one media outlet that will work for every business. These online coupon sites are great for consumers - I myself buy from them regularly. Often times they are great for the company too. The key to using these programs successfully is ensuring you have the proper tracking mechanisms in place, the proper staff that can up sell, and realistic expectations.