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Dud Deals Dont Deliver Loyalty

Living Social must think I am very vain.  I mean, how many manicure/pedicure offers can one man receive per day, let alone purchase?  Perhaps I would feel great about a $40 cut and blow dry offer if I had hair.  And if my face isn't plump enough after all those botox offers, perhaps I would consider breaking my low carb diet to take the 4th Italian eatery offer of the day? 

Ive got one word for the daily deals space: Fatigue.  Whether its Living Social, Groupon, or a host of other retail, bank, or other deal based sites, I'm definitely feeling a quantity vs quality problem. 

The Problem: Offer Relevance by time, place, and format.

While sifting through irrelevant, frivolous, and just plain weird offers used to be a curiosity, its now more of a chore with the purpose of keeping my inbox clean. If I drill down to the fine print on one deal a week its a lot. New entrants continue to pile into this space, and they need to consider some solutions to the fatigue problem if they are going to break through with customers.

The Solution: Four steps to get personal and give the customer control

1. Focus on Everyday Discounts not Luxuries:
While deals can drive discovery, I'm looking for discounts on everyday spend that fits into my lifestyle.  Instead of a once in a lifetime chocolate truffle in the shape of the Brooklyn bridge, find me a low carb breakfast near my workplace and give me the 11th one free.  Give me a way to track and share my experience in the channel of my choice: SMS, App, mobile browser. 

2. Local includes Small businesses:
I acknowledge the franchise is one of the great American business inventions of the 20th century.  But that doesn't mean I'm going to choose a Starbucks over a local coffee shop.  There is something mutual and sincere about the personal relationship built with small businesses. While logistically a challenge to sign up the small guys, they also have much more to gain from a loyalty deals program than the bigger more sophisticated and funded companies.

3. Get Smarter:
Many of the credit card driven loyalty sites have access to all my spend data.  They know I am a soup and salad guy during the week but go a bit wild over the weekend.  They should also know I have a daughter and a cat and drive a car.  Programs need to use that information to select relevant offers from the sea of silliness that pervades the daily deal space.

4. Be Mobile:
Deals are best served fresh.  Purchasing an option for a deal up front relies on the breakage model (assumption 20-30% of purchased deals are never redeemed).  Breakage is a crappy way to keep happy customers.  Instead, leverage geo-location to identify and lock in automatic deals.  One good example of this is Mastercard's Marketplace program.  If you are out in a mall and swipe your card at a merchant, you may be triggered to receive deals for other merchants in that mall that are also affiliated with MasterCard's program.  Cool, huh?  I'd like to get one better, though, and offer breakfast deals at 7:45am and dinner deals at 6pm.  Text me when the surf is up and the local surf shop has a sale on wetsuits. 
Be where and when I am. 

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