I’ve recently signed up with a few deal sites such as Living Social, Spreets and Cudo and everyday I’m inundated with deals.
In the past week alone, I’ve contemplated driving up to the Sunshine Coast for PADI course. Taking up Ballet. Going to Port Douglas for an all inclusive 4 day break (the free food tempted me). I even contemplated having Microdermabrasion and Glycolic Peel. Although, I’m still not 100% what that actually is.
Customer Loyalty
Since signing up I have purchased vouchers for restaurants, hair salon, an educational course and a couple of other things. However, every time I purchase a voucher I can’t help but wonder how the businesses I would normally use, are being effected. Customer Loyalty hit home. Are they losing out on my custom, and more importantly dollars? Is it simply that there was a better deal out there that they need to keep up with? It’s made me question whether this form of marketing is a clever way of building new customer loyalty. Alternatively, are the companies people are using through the deal sites just destroying old relationships? Is this because of the current economic climate and the desperate need for a deal?
I recently spoke with one of these deal companies about a client and was stunned to find out how much they were making from each deal. It’s pretty impressive for the deal site, but not so much for the business owner. They may end up selling a $200 restaurant meal for $30 or a hair salon who only receives around $15 for a cut/colour package that usually sells at $150. On the flip side of this though, there are businesses who are thriving because of these deal sites. They have invested a large chunk of their marketing budget on this form of marketing and as a result have customers coming to them. Customers who usually wouldn’t purchase their products or services. This left me thinking, Glycolic Peel anyone?
Marketing with Customer Loyalty
So what are your thoughts on this channel of marketing? Is it sustainable long term for small businesses or just building a nation of deal hunters?