Most of the best local businesses watch their competitors run outrageous deals on daily deal sites and wonder, “why do they do it?” The best local businesses can’t imagine discounting their products and services like that, and many vow they never will.
That’s understandable, but consider this Adweek article about how many of the biggest luxury consumer brands (Burberry, Bottega Veneta, Gucci, etc.) battle with the same Internet marketing challenges now facing the best local businesses. These brands obsess about blogs, Twitter, eBay, and Facebook hurting their business as much as (if not more than) local businesses worry about Yelp or Groupon. These luxury brands are fighting desperately to control brand and price just like mum and pop. Look at these two images below. One is from Derek Lam’s site, and the other is obviously eBay. Imagine your $1,800 designer handbag showing up on a farm fence post displayed on eBay?
A daily deal promotion does not need to feel like a farm post. Let’s see what lessons local businesses can take from some of the most protective and exclusive brands in the world.
1) Luxury brands have started out carefully. The article shows a great example of how Burberry back in 2009 created a photo sharing site, but moved cautiously, first with professional photographers then opening it up to the public (and even then maintaining some editorial control).
What does this mean to you (the local business owner): You too can start out slowly. Forget what the daily deal sales person is telling you. There is so much competition in the daily deal space, you don’t have to give away steep margins and creative control to participate. You should choose a vendor that uses professional photography (more cost to them) and will let you approve how the promotion is written. You should also ask the daily deal site to segment their mailing list and give you visibility into what kind of consumer is getting your email offer before they send it. You should absolutely negotiate on margin and limit the number of offers you sell so you can test results.
2) They’ve worked hard to maintain the sense of exclusivity. This article gives you a great example of Oscar de la Renta building a website with the concept of a backstage pass to make consumers feel special.
What does this mean to you: You don’t need to call your promotion a deal. Think of this more as crafting a unique experience for your favourite customers. Many of the daily deal sites now have things like travel escapes, tastings, adventures, tour like bundles so they will have opportunities to package up unique local experiences. Work with your sales person to explore ways you can work creatively with other merchants in town to package a showcase of your business that feels more in line with your brand. Look at Gilt City, LivingSocial, and Zozi as brands doing a good job of this.
3) They are reaching bigger audiences. Derek Lam knew eBay could help his brand reach millions of new consumers, but these customers wouldn’t all be right for his high-end products. So he was careful about which products he promoted on eBay, but he didn’t ignore this audience.
What does this mean to you: Don’t avoid the promotion power of daily deal email lists. They can be the most effective way to put your business in front of millions of local consumers. The key is use select inventory. Control and limit your offering so that you showcase your business.
This economy has made it feel like we only buy what is on sale, but that’s not true. Consumers will always buy things that make them feel unique and special. Daily deal sites can get local businesses closer to thousands of local consumers without discounting what makes them special. The next generation of these products must deliver on that promise.
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