If you’ve been watching competitors clock up sales by offering bargains and advertising them on the ‘deal’ websites, then you’ve probably wondered whether your own business should deal itself in?
Maybe, but not before answering a few preliminary questions: What’s involved? How does it work? Should my business give it a go? If so, how do I create an effective deal?
In exchange for offering goods or services on these websites, businesses are promised exposure to large numbers of new customers. Unlike traditional advertising, if the deal doesn’t generate customers, there are no costs to advertising the deal.
Here’s the catch… the minute you secure a buyer for your deal, you incur costs.
The commission charged by deal websites is about 50 per cent of the purchase price of your deal. For example, you sell a $50 haircut the deal website keeps $25 as commission leaving you with only $25.
Further, there are indirect costs, such as extra administration to manage bookings, additional labour, extra travel, and so on. So it’s important that your business fully investigate the affordability of running a deal before signing up.
Unfortunately, businesses struggling to master this new way of reaching potential customers are paying both financially and with their reputation. Understanding how to create a deal that you can deliver is vital to maximising the deal’s benefits and transforming new customers into repeat buyers.
To help you supercharge your deal offer, Handle My Complaint (a company that effects dispute resolution between consumers and businesses) has compiled the following tips for avoiding the most common pitfalls:
The product or service couldn’t be redeemed
This is the worst-case scenario. It usually occurs as a direct result of the company going out of business. Basically, the company couldn’t afford to run a deal.
Say, a small business finds itself struggling with cash flow and so decides that hosting a deal will bring a quick-fix solution. What actually happens is that the business sets its deal price too low and soon cannot cover the indirect costs of delivering the deal. Avoid this by formulating a deal that your business can afford and placing your emphasis on steadily securing new long-term customers, rather than conjuring a quick cash injection.
Customers experience delays when redeeming deals
Most delays in redeeming deals result from the deal not being fine-tuned before it was advertised.
- Limit the number of deals you offer. Investigate your business’ capacity to take on new deal customers based on its ability to serve existing customers. Determine how many new products you can ship out, or how many new customers you can service on an average week and cut the figure by a third – be conservative; you can always run another deal later.
- Make a boundary map. If your deal requires you to travel to service new customers or deliver product, determine how far you can travel and still make a profit when sticking to your usual rate. Think of your deal customers as potential long-term customers and only offer your deal to the areas that you can service effectively and affordably.
- Have a plan for last-minute deal customers. Many try to redeem their deal the month before it expires, are surprised to find the month booked and then request an extension. Although your business isn’t required to extend, if you purposefully leave a few time slots free in the fortnight following the deal expiry date, you can easily service your late-uptake customers with the intention of securing their long-term patronage.
Deal restrictions weren’t clear at the point of purchase
Request a proof from the deal website so you can double-check all information before it’s listed. Ensure terms and conditions are clear so customers aren’t disappointed. Get a friend or relative who doesn’t know your business to check it and make sure they interpret it correctly.
Customers received substandard products or services
Treat deal customers as you treat your non-deal customers. Deliver the exact product or service you promised in the deal description. If your new deal customers receive substandard service or products, they won’t return and you’ve defeated the very purpose of running a deal!
So, as you see, ‘deals’ are absolutely doable, you just need to research and plan before you reap the rewards – and that’s no big deal, is it?
