Given the horror stories of stores nearly crushed by deal-hungry customers, small business owners may be forgiven for their wariness over the daily deal. And yet, success stories abound — so the question is: How to strike a balance and achieve a daily deal program that works for a small business and its clientele?
An answer may be found in a recent post on the National Federation of Independent Business (NFIB) home page, “Groupon isn’t for everyone: Dos and Don’ts for Small Business Owners.” Below is a summary of the salient points:
Don’t use it just to turn a quick profit
Business owners typically pocket 25% of each transaction before paying the product- or service-related expenses. NFIB says, “Business owners who see a [daily] deal as merely a way to boost their bottom line in the short run might be disappointed.”
Do use it to gain new customers
NFIB quotes a Midwest gourmet burger purveyor who managed to break even having leveraged 23,000 daily deal promotions into 10,000 new customers. “The idea was to go after the new people that weren’t coming in,” the owner tells NFIB. “It’s not a money-making tool, it’s a marketing tool.”
Don’t use it as a “Hail Mary” marketing move
Instead, use daily deals as one component in a larger marketing campaign to convert daily deal-customers into regular customers.
Do use it strategically during your business’ slow season
Use daily deals promotions during your slow season to generate new customers who will return again and again throughout the year.
Don’t use it in a high-inventory business.
Instead, structure daily deals around other lower-overhead services. The example given in the NFIB post is that of a wine distributor who offered discounts on wine classes, rather than the wine itself.
Do use it to promote low-inventory, service-based businesses.
Daily deals are best suited for low-inventory and service-based businesses with typically higher margins.
Given the strong presence Sintel Systems has in the restaurant point of sale (POS) marketplace, we share these daily deal best practices with our customers and franchise hopefuls, as we happily share our vast experience and expertise in market sector and geographic growth trends with startup owners in order to help them make the best decisions from the very beginning.
Before you make your franchise move, consider calling Sintel Systems for a free phone consultation to help weigh and understand your options. We serve as a franchise incubator for clients across the retail, restaurant and service industries, forming lasting partnerships with our clients that you simply can’t get from a reseller.
If you are interested in learning more about Sintel’s POS systems and how our knowledge and support, including tight integration of daily deal promotions with point of sale, can impact your future success, please call us for a complimentary phone consultation.
Read the full National Federation of Independent Business post here.
Sintel Systems is the only full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shops, pizzerias, sushi restaurants, cafés and retail stores.
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