What’s the Buzz on Daily Deals Benefiting Businesses?

Daily deals or group buying sites like Living Social and Groupon have become extremely popular among consumers, but you may ask, “Can this discount model work in the B2B segment and what type of ROI are they generating?”

It seems the payback would come via an increase in business in the short term, an increase in additional purchases in the future, and the chance for upselling opportunities. However, the reach of a daily deals promotion goes beyond monetary gain—and its biggest benefit may simply be the exposure your business gets.

How Do Daily Deals Sites Work?

A company can go to a daily deals or group discount site and request that their deal be promoted. You set the terms (read: fine print) for the coupon or deal, as well as a limit on how many can be sold. The sites doing the selling will promote the deal to their customers through email, social media or other means. They take a cut of the sales (sometimes 50 percent) and you see an increase in business (hopefully!).

How Does It Benefit My Business?

While your business may have to eat the cost of providing a discount to consumers, a daily deal isn’t necessarily intended to be a money-making venture. Instead, the goal is to increase visibility for your brand and get your name out there.

The brand marketing with daily deals is twofold. Not only does the deal site market to their members, but those members will often share deals with their business acquaintances —be it through social media, word-of-mouth, etc. Creating this much buzz through traditional advertising could run a company thousands of dollars or more.

Another benefit to daily deals is that they can create repeat customers. A deep discount may encourage people to try out something new, and if they like it, they may return to buy again!

And the Drawbacks?

For companies that generate a decent profit on an everyday basis, a daily deal probably won’t affect their overall revenue. However, for a company that is already struggling, running a discount could cost them more than it’s worth. With the discount itself and the commission that the discount site keeps, businesses will only earn about 25 percent of what they usually do.

If you’re looking for more information, AMA Tampa Bay has an event for you! On Friday, August 19, we bring you Daily Deals: Wielding the Power of B2B Group Buying. Kevin Wells, co-founder and executive vice president of RapidBuyr, will share his advice on how daily deals in the B2B segment. The event will begin at 11:30 a.m. and run through 1:30 p.m. The fee is $30 for members, $50 for guests and $25 for students. For more information, visit our website.


Daily Deals sites: Top Tips for Local Businesses using Pay-on-Performance Marketing (Annica)

Pros and Cons of Daily Deals for Local Businesses (The Local Marketing Expert)

Good or Bad Business Change At Groupon, Daily Deals Sites? (Answer Guy Central)