Thursday, 14 July 2011 and the sorts

Not long ago deal sites had arrived to Romania as well. Hurray!!! Good for the Romanian customers, good for the sites and certainly good for businesses, right? Well, let's analyse this a wee bit, shall we?

First of all, you cannot argue the benefits it brings to customers. They get something (service or product) they wanted to buy anyway, but at a cheaper price. Well, that's partly true for Romanians though, because we react to sales in a more extreme way than other nations do, especially compared to Western peoples. This being an effect due to the prolonged communism, an era of "have not" that found it's way under people's skin, even after two decades from it's fall.

Secondly, it's good for the deal sites, no comment on that :)

But is it good for the companies that offer these reductions? Well it depends on the type of business they're running, their target market and the structure of the database the deal site has (age, gender, revenue and other characteristics of the subscribers to their "newsletters").  But of course, few sites can provide you with a structure of their database. For example, it might be effective for a beauty salon or a cake shop, but if your target market isn't the general public then be prepared to get a lower lead conversion rate. 

Of course, it can be considered a way of getting visibility to a group of people, from which a couple of persons might be in your target market, but the question is, is it worth the time invested in it? The answer: you have to try it out to know for sure. If the results aren't the ones you expected the first time, then you should turn to another marketing instrument and not look back.

In order to do this, first you have to know the product and the reduced price rate, then describe the product and the offer as appealing as possible, find a deal site (the easiest part), contact them and sign the contract, after they send you the preview of the offer confirm (or modify) and your offer is up and going. After it expires, you will get a document with the names and voucher codes and you just have to wait for the customers to contact you and from there you know what to do :)

I would make a few modifications to this whole process, though:
- when they send you the list with the customers they do not send a contact information, which is OK for general products and services, but some businesses it might be useful to have these. Thus, they can create that WOW effect and if the customer forgets to use the coupon the firm can remind him/her of this close it's expiration date, which is a win-win situation. Of course, there is personal data protection involved, but if a person purchases a voucher then (s)he obviously has the intention of contacting the firm in question. 
- why not offer a description of your database to the firm, so the person responsible can take an informed decision in choosing the right site for it's offer? Even if you loose that contact from the start, you have to consider that you will loose him anyway, because it's highly probable that he will be unsatisfied with the results. Plus, if only you do this, the firm will choose you anyway.
- I would introduce offers different from sales, cause price decreases are an entrepreneurs worst nightmare, a simple 10% reduction can have a great negative impact on profits (up to -50% if not more). For example, why not give something valuable for free with a particular purchase or why not give an upgrade?

To conclude, these sorts of sites can be good or bad for business, it's for you to decide when it comes to your company.

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