How to make the most of a daily deal.
How to make the most out of a daily deal
Many of the coffee shops that we talk to ask us about the effectiveness of deals and promotions before offering their clients a deal or a promotion. There is a ton of conflicting information out there as to whether the deal market is growing or shrinking. According to market researcher BIA/Kelsey, the deal market place is expected to grow at 35% a year and deal revenues are supposed to exceed $4billion by the end of 2014.
How does it affect your small business? Here is the good news.
Recent research indicates that there is a 44% retention rate to new customers at the SMB restaurant / coffee shop market. So for every 3 people that you bring into your coffee shop 2 of them are likely to become regulars. That is a pretty good return. Provided that you’re not spending a fortune on the deal and that you can set good goals and measure the return on your investment.
We recently ran some deal campaigns on www.findmecoffee.com
and have found that for very modest investments like a few free cups of coffee or a discount on a key sandwich we saw traffic to those locations spike by as much as 20-30% during the period of the deal. What we discovered was the effectiveness of the deal was related to the following:
What do your customers want?
A Free cup of coffee is great but maybe it’s the latte art of your best barista that’s bringing them back.
Your coffee experience is different from everyone else’s. Try different offers and see what works. If you don’t have success with one deal don’t give up. Try something new. You will find your mojo.
Cool Loyalty Program from the Kent Coffee & Chocolate Shop
Measure, Measure, Measure
You don’t know who won the game unless you kept score. It’s the same for business. Track the changes in sales of the specific products that you had deals on after the deal to see if they are still selling. Keep an eye on the receipts from day to day to see if the deals are bringing people in. Rewards and deals should increase your profits and not drain them. Keep an eye on the bottom line.
Every experience that we have with our customers conditions them what to expect from us. If you get known as having a great weekly deal then word will get around. Get your customers used to looking forward to your deals.
Promote your deal wherever you can and tell people where they can check on them. Keep in mind that most of your customers will be local so use inexpensive local tools to promote your specials. And tell people where to follow you for your deal info.
Most of your customers have a smart phone or a super phone. Consumers are increasingly using their mobile devices to shop and search. Take advantage of this trend by using services that will send messages to consumers mobile devices. There is a 50% greater chance of a small business getting someone to make a first purchase if there is some sort of deal. Deloitte claims that smart phones will influence purchases by more than 5% this year and they expect that number to increase as the technology improves.
In summary, in order drive the growth of your business you need to market in a strategic and cost effective manner that rewards your customers for their business. In an increasingly competitive landscape finding and keeping customers is becoming more dependent on rewarding your clients for their patronage. Rewards are more effective at keeping customers coming back that an expensive promotion that will only bring customers in once. Which would you prefer?