SCHWARTZ CROSSROADS

What's the Big Deal? Me.

So here’s the deal, last week New York City hosted the first of many firsts: the debut of the Daily Deal Summit. The daily deal industry has spawned over 500 similar businesses with the same general business model. The summit was an opportunity for all the players to come together as peers, rather than competitors, to discuss the ramifications they’ve placed on the consumer.

The business of couponing has now become a behemoth of an industry, taking a slide of the billions of dollars the U.S. retail industry U.S. generates. Just like a popularity contest, there are more recognizable brands then those that are the new kids on the “deal” block. Big names like Groupon, LivingSocial (who expects to earn over $1B this year alone) and Gilt participated in conference panel discussions, delivering snappy answers to the little guys’ questions on the pursuit of success.

One challenge that faces the whole couponing industry, and came up repeatedly throughout the day on panel discussions: How do you make daily deals matter to consumers who don’t want what everyone else has?

The word of the future is personalization.

In an era where a novel experience or product discount is simply a social coupon away, more online shoppers are buying discounts to things they wouldn’t normally be able to buy (or willingly afford to splurge on). Yet the problem that became apparent at the Summit was that while Groupon and LivingSocial can get you that once in a lifetime deal, can they keep you as a customer?

Most marketing communication strategies’ endgame is to retain customers. Daily deal sites offer the deal to millions of people, and 83% of them “can’t wait” to open their emails, according to VatorNews. Yet many purchasers are left grumbling. Why? Because millions of others are getting the same deal. We all want to feel special, especially if we’re paying a good amount of money for that treatment. And it’s these companies’ job to make us feel special. The novelty is started to dwindle, and daily deal marketing execs are scrambling to find ways to make the experience that much more personal. It’s the power of “I” marketing.

One of the ways that some of the more ingenious daily deal companies have found to do such a thing is by offering credit. DealPulp.com, the only national daily deal site that offers a 100% national online deal (even to rural Arkansas residents who for which no Groupon is relevant), occasionally offers $1 purchase deals for $10 in credit to use site wide over a period of time (full disclosure, DealPulp is a client in our Consumer PR practice). Out of 90,000+ subscribers, over 20,000 of them continue to open that day’s deal. It’s natural selection. Another marketing effort seen at the show is to offer rarely accessible bundles of things, like couture or vintage clothing a la Gilt or RueLaLa. Another option is go hyper-luxe: offer we consumers a vacation package to Malta or a private experience in a restaurant/theatre/adventure. This way, the average daily deal purchaser feels taken care of because the daily deal knows us.

Customer acquisition is a tough problem that every company with a product has. A retailer is more likely to have a customer become loyal if they can expect something that their friends can’t have. Make it about me. That’s not a request, it’s a demand. If you want to push product at me, it better be served on a silver platter. It’s the marketing mentality of pedestaling the purchaser. And people like me eat it up. Because really, I’m kind of a big deal.

Contributed by Chris Prouty

@loveprouty