Not a day goes by without yet another article on deal sites: new launches, billion dollar valuations, or how they are garnering local ad dollars. For a media business, it is hard to figure out if we should be excited about deal sites or scared to death. Clearly there are some tremendous opportunities — and risks — associated with the deals space.
Groupon and Living Social have changed our world in the coupon or deals space. The numbers speak for themselves. Still, a local media business has the opportunity to become a viable competitor to Groupon and Living Social in their respective communities. Several competing deal sites will be available in most ALL communities soon, and many will be legitimate competitors for local advertising dollars. In response, local media must take what has been learned in the deals space and build a stronger differentiated deals presence in the markets served.
Finding deals that will work is the hard part. Advertisers selling food, entertainment or personal services such as spa treatments work the best. Patio furniture, mattress stores, replacement window and lawyers do not work. You will also find that in many cases the advertisers offering deals don’t currently advertise in the traditional local media space. They tend to be businesses using Google ad words deeming the local newspaper, radio and television too expensive.
10 Tips on how to compete with in the deals space
How will your business best compete in the deals space? Here are 10 considerations that should help guide the decision process:
10. Realize that Groupon and others will be calling on businesses in your markets.
9. Differentiation: The number one thing is to differentiate your offer to local advertisers by bundling your ad space along with access to the database of names you have built. Push the fact they get branding as well as immediate sales versus just sales from the likes of Groupon. If you don’t have ad space to include then come up with something that delivers something the advertiser can’t get from the big guys. Also Promote you are part of the community and you want to help them drive loyal customers and not just one time visits.
8. Know going in that you need a dedicated salesperson who owns deals, and in most cases the sales are done over the phone.
7. Remember that you will be calling on lots of small businesses that can participate without plunking down one dollar upfront – a huge selling point compared to advertising without exact knowledge of what they get in return.
6. You don’t have to do a deal every day.
5. You need a champion that knows what deals will or won’t work and can say NO to sales if something doesn’t make sense.
4. Deals and the dollars associated with them are dollars often taken out of the local media budget.
3. You must create in your face marketing to let advertisers know you are in the deals business. The big guys spend lots of dollars promoting their deals and although your business cannot compete on dollars spent, you certainly can make sure your community knows about your business.
2. Innovate and determine how you can grow beyond daily or weekly deals and into instant deals.
1. Remember that this a social media business. You need the deals shared with friends and discussed in a viral nature.
Finally remember that people are always looking for deals and local businesses are finding that using daily deal sites really does work. If you are a local media business or just an entrepreneur looking to start a business the deals space is lucrative if you can really drive customers to a local business. It’s not about the deal for the advertisers. It’s about building a new, loyal customer.