A raging debate seems to flare up every so often that suggests that consumers who use Daily Deal coupons are very difficult to convert into returning visitors. Let’s dig a little deeper into the evidence, and open up the dialog to capture your experience.
What’s a Tour Bus Consumer?
The analogy is a busload of consumers visiting your store for a burst of product consumption, followed by them rejoining the bus to head down the road to the next discount offer, never to return. Some think that there is a danger in the trend – a trend where consumers begin to make their buying decisions increasingly around the best offers, thereby reducing customer loyalty.
The Tour Bus analogy is also an interesting metaphor when you consider how GroupOn’s CEO positions his business to consumers as a next generation city guide – a place to discover more and get out more.
Survey Says?
It’s early in the use of Daily Deals, so there are few real metrics to work from. The most definitive independent study was in an August 2010 survey done at Rice University, involving a survey of 150 GroupOn small business users.
While this is a small sample, it does offer interesting insights. The small businesses were divided into two groups – those who considered their GroupOn experience profitable, versus those who viewed it as unprofitable. The estimated ratio of returning visitors as a percent of Groupon store visits by these two clusters of businesses were 31% and 13% respectively.
One comment in the study author’s summary findings is poignant, and perhaps a little far-reaching as a conclusion from 150 survey respondents.
There is widespread recognition among many business owners that social promotion users are not the relational customers that they had hoped for or the ones that are necessary for their business’ long-term success.
The study does highlight that return visits seem to performing more poorly in segments such as restaurants, presumably where exploration is a part of the appeal, versus personal services, where a positive consumer experience could be more prone to result in a new recurring relationship.
Keep in mind this study is with only GroupOn. What about the host of other Daily Deal vendors – how do they stack up?
Tell us about your experience!
Paul Rosenfeld
Hey Perry – This is a great resource you're building here and I salute you for the foresight about it. We know a lot of our customers have been using Daily Deals and in the coming months I'll make sure to be an active contributor to your site as I think it should provide a valuable service to the small business owner.
I'm not sure what will change their behaviors though – I see this site more for people like us, frankly. In one last discussion I had, the owner was ecstatic about her $11,000 check she received from Groupon – until I explained how that $11K needs to go to her technician, and for the laser, plus the next 2 checks as well – in short, the Groupon yielded about 500 customers and a breakeven on the whole thing, plus taking up 3 months of her office's capacity. But the fact remains, her mindset was "this is profit I'm getting as a check" and not what it should have been – I just broke even and I better convert these people into repeat customers. Anyway, as we both know there's many more anecdotes and stories we can tell and will do so over time. Best, Paul
December 18, 2010 at 8:21 pm
Daily Deal Success is All About New Customers | Yipit Blog
[...] assumed four main types of buyers: (i) tour bus customers who use their voucher and don’t return, (ii) new customers who become repeat visitors, (iii) [...]
January 10, 2011 at 10:01 am
Melvin Rajiv
Daily deal sites and group-buying websites are a great way to save on the products and services you need, whether it is groceries or furniture. It is great that they are expanding and growing so that more people can use them.
April 12, 2013 at 9:43 am
man suit
I happen to be checking out many of your respective posts and i have to say quite clever stuff. i’ll absolutely bookmark your blog.
May 1, 2013 at 12:31 pm
orangecountymoversca
I've a travels bus business and I am new in this system. I am very proud to know your information that is so valuable to me. Your writing gives me a vital knowledge about this kind of bus issue. Which helps me a lot to build up more my business.
May 18, 2013 at 9:22 am
nobmaymnbuh
близкий веб сайт http://metall-vis.ru/kovanie-cvetochnicy – декоративные кованые заборы, кованые двери тула, кованые перила для балкона, кованые калитки серпухов.
May 21, 2013 at 12:11 pm