Daily Deal sites can be an effective way for businesses to branch out and reach new customers. These websites are devoted to providing customers with discounts on their favorite products and services. They can be a great way to bring new customers to your business, saving you time and generating more profit. However, your success depends largely on how you use the site, when you post offers and why you decide to participate in the program.

How Do Daily Deal Sites Work?

When a shopper visits a Daily Deal site, they are asked to enter a valid e-mail address. Offers are then sent to the inbox. The customer can view discounts and purchase coupons for products at a reduced rate. While the best-know daily deal sites are Groupon and LivingSocial, there are hundreds of smaller daily deal sites for every product including fashion, kids’ clothing and toys, health and beauty supplies and almost anything else you can think of. Many sites are targeted to a specific audience; like bargain-savvy moms, singles or pet owners.

Businesses posting discounts or coupons on these sites generally offer at least a 50% discount on the product being offered.  If, for example, you own an auto ac repair business, you can offer discounts on parts and labor costs. Or if you run an upholstery cleaning business, you can offer a $25 to use the upholstery cleaning machine on the couch for just $12.50. The daily deal site takes a percentage of the sale, usually between 40 to 50 percent. On a sale of $12.50, both you and the site you choose will receive $6.25 for each sale of the coupon. Keep in mind that if your coupon is never redeemed, your profit margin increases; in fact, some companies report that between 5 and 40 percent of their coupons go without redemption.

What to Do

Bargain shoppers are showing more interest in services rather than products, which is a benefit for the small business owner because you do not have to take the cost of goods into consideration.

Creating a repeat business customer base is as simple as paying attention to trends. If you provide a coupon for a reasonably discounted price and notice a growing interest, consider posting the same deal regularly to bring in repeat business. Try packaging the coupons, offering a “two for one” type special, or a discount on multiple services when purchased together.

Test different sites to see which one fits your needs the best. You may have a higher chance of success with sites that are targeted to specific industries or products, or you may want to start out with a smaller site if you’re working on a small budget.

Make sure that you put a small limit on the number of deals you list on the site, and make sure that your employees can keep up with the increased demand. Include fine print options such as limit one per customer or note that the discount cannot be combined with other offers.

What to Avoid

Try not to shower your customers with choices or provide coupons too consistently. The best times to launch a discount are when you are promoting a brand new business, during your slow season or when you are trying to get rid of old inventory or extra inventory.

Some sites do not allow you to post deals onto other similar sites within a certain period. Known as an exclusivity provision, some sites can keep you to themselves for as long as 90 days. If you know you are going to be with that site for three months, it may not matter to you but to other business owners, such a long provision can be a deal breaker.

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