While controversial, daily deals effective for attracting new customers

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.
Written by Heather Clancy, Contributor

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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