Local deal sites are sprouting like weeds. Probably because Groupon is making more money than you can imagine.
So the question is, what are the differences – and which one is right for your business?
The Local Deal Sites
There are far too many sites to cover every one here, so we’re going to look at the two biggest, and two new ones that are creating quite a stir.
Groupon
The original deals site, with a huge reach (fast expanding worldwide), Groupon is well known and has millions of members. Groupon insists on 50%+ discounts on offers, and takes a big cut of the revenue a business actually receives – but this can be worth it, because in many markets a tremendous number of people will learn about and potentially try out your company’s service. I’ve previously discussed using Groupon in more detail.
Living Social
Living Social is likely the 2nd largest deals site, and now has some powerful backing courtesy of Amazon.com, which purchased a large stake in the company. The way the site works is virtually indistinguishable from Groupon. The audiences, however, differ somewhat, with market shares varying by individual location. A recent study found that Living Social users are on the whole younger, somewhat wealthier, and more frequently located in the South and Pacific regions than Groupon users.
Google Offers
Google recently announced the new Google Offers. This appears to be essentially another Groupon clone, advertising discounts over 50% and the ability to receive regular emails with new offers. The service is currently in beta, available only in Portland, San Francisco, and New York City. They are also collecting emails from other cities. Although Google will have to build up a list of subscribers to its deals, the company’s ability to promote Offers on Google Maps and in the search results may make a list less crucial to their success.
Facebook Deals
The newest entry into this fray is Facebook’s recently announced Deals platform (unique from their previous Check-In Deals). Facebook has taken a unique approach to the deals space. They do not require the steep discounts seen at other deal sites, but are clearly targeting those businesses whose services are consumed socially (ie, restaurants, events, entertainment, etc). This plays to Facebook’s strengths, as deals will be automatically promoted among groups of friends through the existing feeds and notifications on Facebook’s site. Visit their business page or download the business guide for more details. Like Google Offers, Facebook Deals is in beta and available in limited cities, currently Dallas, Atlanta, Boston, San Diego, and San Francisco.
Which Deal Site To Use?
With all the options, which daily deals site should your business pick?
- If you’ll offer a big discount – As I discussed in the Groupon review, there are downsides to the way traditional daily deals sites work. Offering 50% off, and netting more like 25% of the service’s regular price doesn’t work for some companies, but it can bring a flood of customers to the right business. If this is what you’re looking for, it would be best to look at both Groupon and Living Social. Check which site appears to garner more sales for a given type of deal in your area, and speak with the salespeople to see which site will treat you better. If Google Offers has launched in your city, consider their service as well, just realize that it may be some time before they have the volume of Groupon and Living Social.
- If you’re looking for the social side – If you provide services that are consumed socially, Facebook Deals sounds like a slam-dunk, and it might be successful even for other types of companies. It provides an extra incentive to get people sharing your company and recommending you in their news feeds. There appears to be very little downside to this program – it might be wise to try it as soon as it arrives in your city, because there is a good chance it will end up flooded with deals.
In addition to the above options, some cities have deal sites which are strong in their particular area, and some local newspapers are also offering deals. With any option, be sure to ask about what they’re charging you, what options they have (can you limit the number of deals purchased?), and the kind of distribution offered by their mailing list/website.
Daily deals are still a relatively new phenomenon (Groupon launched in November 2008). I’m sure we’ll see continued changes as the space matures over the next few years. As usual, change will make things more complicated, but also create opportunities for savvy businesses.
Daily deals and group deals site no doubt have a lot to offer for businesses. Sites like Huddlebuy have created an opportunity for small businesses to benefit from the same kind of discounts on goods and services that large companies have, using the online group buying strategy. This one’s exclusively for small business owners in UK.
Thanks for alerting us to one of the sites available overseas – you can surely see that I’m most knowledgeable about the US market.
As a caveat to the readers, however, it does appear this poster works for Huddlebuy.
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Ich fotografiere auch keine fremden Menschen.
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