Shortly after the local deal craze began, I subscribed to several sites. At first I was excited to see the awesome deals I could get, but I soon realized that I only really cared about and was willing to purchase from business with which I was already familiar. It was also clear that the sheer volume of emails was unmanageable. In addition to getting the daily emails sent directly to me, friends who knew that I patron certain places would forward me the deal too so that I would often end up getting the deal multiple times.
I was only utilizing the deal site to get discounts on businesses that I was already willing to pay full price at. Even great deals were not provoking me to try new places without knowing anything about the business. There were no endorsements, no referrals from friends and no customer reviews, so it was too much of a risk for me to take.
According to Forrester Research, my experience is not unique. Deal services often fail to generate significant new customers. Though they often do drive repeat business, it is at a high cost to the business. Businesses only generate revenue on the value of the deal after discount and then pay a hefty percentage to the deal administration service. True the business is getting my repeat business, but they would have anyway if they had had the capabilities to reach me directly or indirectly through someone in my network.
So what is a local business to do? In just a few weeks, Customer Lobby will roll out a reputation marketing solution with a deal module that, unlike deal sites, will give 100% of revenue to the businesses and will generate both repeat and referral business – truly a good deal for businesses.