Daily deal sites like Groupon and LivingSocial offer huge discounts on products and services through partnerships with local merchants. These deal of the day websites can produce wonders for local small businesses that need foot traffic. Traditional online advertising isn’t nearly as effective as social buying platforms for getting people to visit local storefronts. For approximately the same price as a decent-sized online advertising campaign, a collective buying site will feature your business’s deal offering on their website and notify local email subscribers. With many of these online services boasting readership in the millions, they can literally flood your store with hundreds to thousands of new customers within a single day or two. Moreover, these daily deal websites only charge you when sales are generated. So not only will this promotional tool earn a bucket load of cash flow and new customers for you, but you’ll only have to pay when real results are obtained for your business. A pay per sale model combined with a powerful distribution system, time-sensitive discounts, and social media based user referral incentives make group buying sites a hands down winner for most local business owners seeking to gain new customers and elevate sales.
1. Instantly acquire new customers – For budding small businesses that are starved for clients, group buying sites are the most effective solution to acquiring new customers. Groupon and others like it can send you hoards of deal crazed consumers for you to convert into long-term customers. Your return on investment (ROI), in terms of getting new customer in the door, is unmatched compared to other advertising options.
2. Quickly generate cash flow – Top daily deal sites like Groupon have generated sales in the tens of thousands for some business owners. If a merchant sold 10,000 vouchers at $10 each, that’s $50,000 (minus Groupon’s standard share) in cash flow that was raised in just a matter of a few days. No other advertising model rivals the rate at which deal sites can inject cash flow into a business.
3. No upfront costs – Deal sites utilize a pay per sale (PPS: a.k.a. cost per sale; CPS) model to generate revenue which means business owners pay nothing upfront to use their services. In contrast to traditional cost per thousand impressions (CPM) or cost per click (CPC) advertising fees, a cost per sale charge ensures that you only pay Groupon when a sale is generated for your business. Barring unauthorized purchases or any refunds that buyers submit to the deal site, your advertising expenses produce real results in terms of customer acquisitions and the production of sales.
4. Measurable results – Companies can spend millions of dollars on local radio, television, print, and online advertising campaigns and never see any clear increase in offline sales, let alone any change in traffic to their local stores. Vouchers require that the customers visit your storefront in order to redeem them. When they do this, you can easily track the profits and expenses for each voucher sale that’s generated. Before that however, you’ll already know exactly how many people received your deal offer in their inbox, how many people opened it, and the number of people that purchased it.
5. Increase offline visitor traffic – Previously, the resources available to convert online sales into foot traffic for local store owners was limited to gift cards and simple coupons. The conversion rates of the latter are quite poor and without a discount, gift cards don’t fair much better when it comes to getting customers into stores. Social buying sites on the other hand represent a very efficient way for merchants to push traffic into local storefronts and acquire new customers.
6. Gain Facebook & Twitter followers – People love businesses that offer deals to their customers and they’re more willing to hit that “Like” or “Follow” button on Facebook and Twitter because of it. Business owners have reported that their Facebook fans and Twitter followers have increased after being featured on daily deal websites like Groupon.
7. Minimal time commitment – Groupon and other daily deal sites do nearly everything for you. Your time commitment upfront is limited to gathering a few images and creating some text copy regarding the limitations of your deal offer. Groupon employs nearly one hundred full-time writers to ensure your featured deal pops off the page and it creates quite a buzz for your establishment. In comparison, effective online advertising requires a much larger investment of time to create the ads, complete the necessary keyword research, and setup conversion tracking.
8. Incredible business exposure – Large social buying sites like Groupon have millions of email subscribers and they get just as website visitors each month. They distribute your deal offering to local site members that then retweet and share your deal throughout the Web. Since you only pay when a sale is generated you’re essentially getting free advertising to boot and lots of more buzz for your business.
9. Highly desirable customer demographic – The average user of daily deal sites like Groupon tend to be educated females with money to spend that are socially active both online and offline. If you’re a local business owner that utilizes Groupon this means that those new customers possess a great potential to return to your establishment and share their experience with their friends.
10. Reduce your advertising budget – The primary goal for advertising is to acquire new customers for your business. Social buying websites are much more effective at this than traditional advertising channels. By redirecting your company’s advertising budget to offer a group deal instead of traditional local ads allows you to spend less on advertising and still acquire more customers.If you liked this article, please take this time to share it with your Facebook friends using the Facebook button (see Facebook post button to the left) or retweet it using Twitter (see retweet button to the left). You may also want to follow us or subscribe to the site to stay up-to-date with this article. If you'd rather follow us from your Facebook account, join our Facebook fan page or subscribe to our NetworkedBlogs profile.
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