Deal of the Day?

Random Deals Have Their Place – But Targeted Offers are Often the Better Deal, Both for Consumers and Major Brands

Groupon's deep-discount model is enticing, but offers are not always relevant.

The appeal of a deal that is just too good to pass up can be, well, difficult to pass up. And a new one every day may sound great in theory – but that sweet price break is not always a highly relevant offer. More accurately, it is rarely relevant.  Daily deal websites such as Groupon, Living Social and Gilt may entice the saver in all of us, but as they fill up email boxes, text messages and Facebook pages, the subscriber may begin wondering what they really signed up for.

From the marketer’s perspective, Groupon charges a comparatively high percentage of the pre-paid coupon’s face value.  This model is only ideal when the marketer’s product has a very high margin (like services such as spas) or needs brand awareness that is too costly to develop through other channels (e.g. small, unknown, local businesses). Larger retailers such as restaurant chains, major retailers and brand manufacturers have slimmer margins, are better known and just don’t need to widely offer such deep discounts.

Are there better options? While daily deal sites are still proving their usefulness, there are alternatives that are highly targeted, provide significant value and cost the consumer nothing up front.  One such method is front-door media – used by major brands like McDonalds, Kohl’s, Home Depot and Best Buy to bypass the mailbox and get the right message of value directly into the hands of their target shoppers. Similar to the daily deal sites, the discounts are significant – often in the neighborhood of 50 percent off or more – but unlike those sites, the offers are highly targeted and meant for the recipient based on a variety of factors such as demographics, lifestyle segmentation, consumer behavior, ethnicity and consumer buying power. Front-door marketing is not a new tactic, however it’s more sophisticated than ever, and effectively poised to drive traffic and purchase decisions as part of an overall marketing program.

Are you considering new, untargeted and unproven methods to increase sales? Will the end result warrant the investment? Shouldn’t a major brand like yours be speaking directly to your customers with branded offers delivered directly to the front door?

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