While controversial, daily deals effective for attracting new customers

While controversial, daily deals effective for attracting new customers

Summary: For attracting new business, it's hard to beat daily deals campaigns. But online survey tools and digital loyalty systems are more valuable for nurturing repeat business.

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TOPICS: SMBs
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There have been plenty of articles written about how dangerous some daily deals sites or campaigns can be for small businesses, because of their tendency to attract one-time customers rather than those who may be interested in establishing long-term relationships with your company or brand.

Perhaps it is ironic, then, that daily deals were listed as the most effective way to attract new customers by 53 percent of the small businesses participating in a recent survey by marketing services company Constant Contact.

Its survey, which reflects the opinions of 1,305 participants, focused on the most effective ways to drive customer engagement.

If you're not familiar with the concept — pioneered by troubled company Groupon — these are sites or campaigns that businesses create local campaigns that offer consumers and shoppers some sort of discount or promotional benefit for acting immediately to buy one of your products or services.

Here are four other top ways to attract new customers, based on the survey. The percentage indicates the businesses who named these methods as most effective.

  • Internet ads (51 percent)

  • Web listing sites (38 percent)

  • Social media ads (37 percent)

  • Online coupons (29 percent).

"Deals can be a powerful tool," said Dave Gilbertson, vice president and general manager of Constant Contact's SaveLocal service. "But perhaps more than any other tool, they need to be done right or they can be highly detrimental to a small-business owner."

The survey focused on another high-level priority for small businesses: Customer engagement and the art of turning a one-time transaction into a long-time relationship.

Among the best ways of doing that, according to the Constant Contact survey, are using online survey tools to engage with customers (60 percent), implementing digital loyalty/frequent shopper tracking systems (56 percent), and using customer relationship management (CRM) systems (46 percent).

Read more of the survey results.

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Topic: SMBs

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3 comments
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  • Constant Contact Survey

    What a bunch of self-serving garbage from both the author and the "survey".

    The way to turn a first-time customer into a repeat is with great service at a reasonable price. None of the software tools are worth the time and money if the customer doesn't have a good experience with the product.

    Some examples from personal experience:

    - ordering flowers for Valentine's Day from an on-line vendor. First, I got turned off by all the up-sells to guarantee delivery in the requested timeframe. A supposed good deal wasn't by the time the upsells got done. The flowers were noticeably in worse shape than some my daughter received at the same high school where my wife worked. I told the company what happened in their on-line survey. They have spammed me with coupons and offers ever since. But I won't order from them ever again. Instead, when I want to give my wife flowers, I go to the grocery store or Wal-Mart and pick them out personally.

    - groupon type coupons for carpet cleaning. Again, crappy job for a supposed good deal price from most companies. Finally, one cleaning service came through and did a very good job. I give them repeat business on a regular basis, even though I can get a better price in the on-line offers.

    I do the same for automobile servicing, my furnace servicing, etc. Once I find a company that gives good service at a reasonable price, I give them my repeat business. Period.
    thinking about consequences
    • But...

      But how do you get that first time customer in the first place? That's the whole point of the daily deal.
      dsf3g
  • Brand loyalty is passe.

    As it should be. The nice thing about shopping online is that I can easily reach a number of vendors, and choose the best deal at the time, regardless of brand.

    Oh...I'm excepting the typical fanboys and shills that constantly infest these pages.
    radleym