Reopening your business after the COVID-19 closures? Online discounts are a great way to drum up more business, attract new customers, and let your established clientele know you’re ready to welcome them back. Here’s how to make sure that you set up online discounts that put more money in your pocket and ensure social distancing doesn’t put a dent in your earning power!
Structure Online Discounts to Benefit Your Business
As a small business owner, you’ve probably heard a lot about voucher merchants and online discount platforms. These are websites offering buyers deep discounts on products and services, ranging from restaurants and retailers to salons, spas, and fitness centers just like yours. They’re great to get the word out about your business. But after percentages and marketing fees are deducted, they may cost the business offering the deal, even losing money on every sale! What if instead of creating a one-time surge of new customer traffic, there were a way to use daily deals to make your business stand out consistently and cost-effectively? Here’s how to structure an online discount for success, making sure it fits into your long-term marketing plan.
Do Discounts Equal More New Customers?
Yes, but with a powerful caveat. Essentially, online discount platforms (voucher merchants) connect local businesses with bargain shoppers. While it’s true a discount coupon can be a powerful, effective way to attract new customers, the business model isn’t without risk. In fact, statistics bear out the fact that when shopping from a discount-dealing platform, shoppers are less likely to convert into repeat customers, due to the very nature of the platform. Unfortunately, surveys show that when using a voucher merchant platform, on average, fewer than 19% of shoppers ever visit that business again. Here are the benefits, the drawbacks, and how to make sure that when you create a daily deal, it serves your long-term business goals.
5 Benefits of Daily Deals
- Increases local visibility and brand recognition. A Daily Deal introduces your business to an entirely new set of prospective clients.
- Moves inventory and increases service bookings. If you have slow-moving stock or underperforming services, daily deals are a great way to get them to turn a profit for you. Use discounts to move items where you have a clear idea of profit margins. Or instead, use as a loss leader to make customers aware of your business and the other services and products you sell. You can also launch new services at a discount to get people to try new offerings.
- Builds customer relationships. Use a price promotion to build a relationship instead of a one-time purchase by spacing out the discount over a series of visits, rather than a singular discount on the total bill.
- Attracts new customers. You’ll get a brief surge in business (traffic or revenue, depending on your campaign) as customers take advantage of the deal.
- Provides a boost in slow seasons. By timing a promotion to coincide with a slower season, you can increase cash flow in slower months and avoid service disruptions for your established clientele.
Beware These 4 Discount Duds!
- Bargain shoppers instead of returning customers. The disadvantage of using a discount platform is that it attracts bargain shoppers, who are notoriously difficult to convert into returning clients. To limit diminishing returns on your promotion, implement limitations on discounted service vouchers you’ll sell, and decide whether to limit the promotion to new customers only.
- Deals can hurt your brand. On larger discount platforms, the focus is placed on the deal itself, rather than your business and the quality of your services. This, in turn, can impact the perceived value of your brand.
- Make sure you can turn a profit. Keep in mind, most small businesses operate on slim profit margins, so a discount deeper than 50% can end up costing a business with each sale.This is especially true if there are hidden costs or additional percentages deducted from the discount you offer to shoppers.
- Price erosion. One of the largest hurdles in converting one-time bargain shoppers into returning customers is it can diminish the perceived value of your products and services. Without the coupon to incentivize them, many shoppers never make a second purchase, or “hold out” for the next coupon.
Tips to Structuring a Great Daily Deal
When launching a promotion, the first thing to consider is deciding on the goal of the promotion. Examples of your objective might include: getting new customers in the door, launching a new service, cleaning out inventory, or strengthening your local visibility. Make sure your goals are realistic, achievable, and most importantly, quantifiable. For example, get 12 new customers, reduce slow moving product inventory by 80%, get 6 bookings for a new service. Establishing clear goals allows for a more targeted promotion and establishes a metric you can use later to review analytics and measure the success of the promotion.
Here’s how to structure a Vagaro Daily Deal to reap all the benefits of a discount promotion while sidestepping the problems.
- Use the opportunity to cross-promote and upsell. Instead of offering a deep discount on a class or service, cross-promote or upsell a related service. For example, if you’re offering a 50% discount on a massage, make the discount dependent on the purchase of a facial.
- Split the Deal. Instead of offering a discounted introductory service once, split the deal and spread it out for use over several visits. For example, instead of offering a 50% discount on one yoga workshop, try offering a 20% discount spread out over three workshops.
- Set limits. Limits help your promotions serve you, instead of hurting you. Examples of limits include: Promotional value to expire after 120 days, new customers only, online booking required, registration required, limit one promotion per customer, promotion may be purchased as a gift, limit one per visit.
- Word your promotion carefully. If you’re using a Daily Deal to sell overstock or slow-moving product, make sure that your promotion stipulates the products and lines where the discount applies.
- Remember your regulars! When offering a Daily Deal for new customers, don’t forget to reward regulars for their loyalty with discounts and perks of their own.
- Prepare your staff. Make sure the service providers who will be affected by the promotion are on board and prepared to provide the same quality of service as full-price customers. Then, schedule accordingly to accommodate sudden surges in traffic. Put your best foot forward and win repeat customers with great customer service!
- Follow-up! Make sure to capture email addresses and complete customer profiles. Later, you can use analytics to track the performance of your campaign and use the customer data to target future promotions.
Vagaro Daily Deals Are Different
Vagaro Daily Deals are structured to benefit beauty and fitness small businesses. Instead of an all-inclusive discount platform where shoppers are looking for a deal first and foremost, Vagaro Daily Deals are hosted on the Vagaro Marketplace. That means that the audience for your Daily Deal already knows they’re looking for a specific service in beauty or fitness. This removes the distraction of unrelated industries competing for the same shoppers. Additionally, that means that unlike other coupon or discount platforms, a Vagaro Daily Deal has more potential to convert discount buyers into repeat customers! You’ll reach a greater audience of customers with no upfront cost. There are no additional marketing fees with Vagaro Daily Deals. Everything you need to get started is included with your Vagaro Pro account. In other words, running a Vagaro Daily Deal is free. There are no promo codes further discounting your deals and no percentages deducted—you keep all the earnings! After your Daily Deal concludes, you’ll be able to review reports to measure the success of the campaign. This makes it easier to measure if you’ve achieved the goals you set for your promotion: whether you got 12 new customers, booked 6 clients for a new service, reduced slow-moving inventory by 80%. With a Daily Deal designed to help you achieve your goals, you’ll find it easier than ever to reach them, give your brand a boost, and keep the new customers you’ve brought in the door.
Ready to grow your online presence and connect with new customers using a Vagaro Daily Deal? Get started today and boost your sales tomorrow!
Header Image: Mia Montemayor via Vagaro