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Festival Network Online

October 2012


Have you considered using a deal site to market your food business? This month's article from Annette Washington will show you the ins and outs of using daily deals.


If you're looking for more ways to get your products out there, check out the FNO Marketplace! It's free to list your items, complete fee information is listed here.


Happy cooking!
FNO Newsletter Editor

What's The Deal on Daily Deals For Food Businesses?
by Annette Washington of The FoodiePreneur



Are You Considering Using A Daily Deal In Your Food Business?


Daily Deal sites like Groupon and Living Social have been around for a few years now. You've probably heard many arguments as to whether these programs are good for the independent food business owner. I admit that there are many pros and cons for using these and other types of coupon-ing or discount deal methods to attract customers to your business. I also think that the success or the benefit of using these programs depends on the preparation taken before you sign on.


The costs for taking part in a daily deal can be overwhelming for food business operators. Basically, if you choose to offer a daily deal, you will pay at least half of your sales to the Daily Deal companies. Then you must add-in any extra employees (yes, you may need this because many buyers will wait until the deal has almost ended before showing up-that could add up to a lot of extra customers in one or two days). Of course, you have your food cost to take into account as well. When you look at these numbers, you could view the daily deal method of marketing as a losing venture.


Do Daily Deals work for food businesses? It has been proven that you will increase the number of customers who will walk through your door. If you are not prepared for this onslaught of coupon- waving deal participants, it could be devastating to your business (as seen on the video).


So, is it a good idea to do the Daily Deals? That depends on how you look at things.You need to go into the daily deal market with a plan. Start by realizing that you may not make money with this method of marketing. With the deal companies taking half and the cost of doing business; you should consider methods to capture information from the buyers of your deal. Some of the buyers may be discount hunters; but not all of them are. If you had 2000 people who took advantage of your deal and found that 20 of them stayed on to be regular customers, would you consider your deal to be a success? Put another way- take some time to estimate the value of one customer.


In an article written by Brad Sugars on suggests this-

"The simplest way to estimate lifetime value: Plug actual or estimated (if you're in the planning stages or just starting out) numbers into the following equation:


(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)


An easy example would be the lifetime value of a gym member who spends $20 every month for 3 years. The value of that customer would be: $20 X 12 months X 3 years = $720 in total revenue (or $240 per year)


Now you can see even from this hypothetical example why many gyms offer a free starter membership to help drive traffic. Gym owners know that as long as they spend less than $240 to acquire a new member, the customer will prove profitable in a short amount of time."


Once you figure your customer's lifetime value, you will know how much that customer is worth to your business. How do those 20 customers look to you now? On a smaller scale you could easily have 600 customers who come through to redeem their deals and end up keeping only 60 or even 6. The point is to use the daily deal marketing method to your advantage. Don't expect to make money on the coupons. Aim to make money after the fact; on the few customers that you gain.


Plan mini-events throughout the daily deal period- Have contests (that don't involve too much extra work) that will make customers complete an information card in order to win. Setup an email marketing program that keeps in touch with these customers. Touch them more than once. Don't send one or two email messages and give up if you get no response. It is said that it takes at least 7 'touches' before a customer buys; don't quit after just a couple. If they opt out of your list, it's ok.., you still have others who are interested in what you have to say.


An article written by Rev. David Ciancio on states that, "84 percent of restaurant operators consider restaurant-specific marketing emails to be effective in increasing revenue for their restaurants, and 78 percent of consumers said an email from a restaurant would motivate them to go to that restaurant. In addition, 63 percent of restaurant operators say they plan to use such emails in the next year."


Develop an effective follow-up plan as a part of your daily deal venture. This technique will ensure that you get the most bang for your buck out of the whole deal.


Want to improve your business sales?

Get Your Free Copy Of 7 Secrets To Increasing Your Business Sales

"Oh! The awesomeness of it all!"

Annette Washington-"The FoodiePreneur"

If you've got a food business and you need help with your marketing,

work with me personally (


P.S. Fund Your Dream Lifestyle the Easy Way (Here)







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