Daily deals can be a great way to draw some traffic, but what else do they mean for your food business? This month's article takes an in-depth look.
As we're winding down for the year, we're wishing all of you a happy holiday season and a wonderful and prosperous new year!
FN Newsletter Editor
Daily Deals for Food Businesses
by Annette Washington
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 Entrepreneur.com 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:
Read more here!
Don't Forget to Search All Years!
As promoters are wrapping up their 2016 details, it might take them a bit to get around to updating their event for 2017. But don't let that deter you!
You can still search for events for next year even if they haven't been updated yet. When you're doing a search, be sure to select "all years." This will keep events from the previous year in your search. You'll be able to use that previous year's info to estimate what to expect for next year, and you can always call the promoter to confirm any details. Many of the details in reoccurring events remain the same from year to year.
We work diligently all year round to get updated event information as soon as it's available, but keep this tip in mind if you're not quite finding the events you're looking for.
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