Maybe You Should Be Using Deal Sites

While most analysts are looking at “email exhaustion” or the potential for fraud for the current problems with daily deal sites, Seth Godin has always known the real problem.

They’re giving deals to the wrong people.

Your best customers are your existing customers, not new customers, as he writes in his classic Permission Marketing. New customers don’t know you. Their chances of coming back to you are lower than for existing customers. So why are you giving new customers your best deals, and ignoring your customer base?

Besides, you already have your existing customers in an e-mail list. Don’t you? Well, don’t you? If you didn’t figure that out over the last decade, there is something truly wrong with you.

Want to build that list? Promise every existing customer who joins the list a special discount. Maybe 20% off on their next purchase. (Where do I sign?) Here, I’ll copy you on what I send. Just print out that next e-mail from me – it will have the coupon on it. (That makes sure they actually give you a legitimate name and address. If the referral e-mail bounces, no discount for you.)

If you’re not building your customer base through daily deals, though, how are you doing it?

Customer Relationship Management (CRM) is more than just software. I know, companies like Salesforce.com have been selling it to you as a SaaS software service for years. You put the data in, but you may not know what to do with the data once it’s there.

Obviously, you learn to treat your best customers well with it. You ask them for referrals. On your next email, along with a special offer to your best friends, you offer them an additional discount if they refer a friend who then buys from you. Most big companies create elaborate “points” systems to track things, but if you’re a small business, you don’t need that.

This is not rocket science, people.

Now there is a group where such “daily deals” might be considered. Considered purchases. I’m talking here of things we may buy every half-decade, decade, or less. Cars. Houses. Roofs. Solar systems. Energy efficiency.

Consider a solar lease. It may go out 20 years, a promise to purchase the power from a system at a designated price. If future renewable abundance drops the real price of electricity through the floor, too bad – that house (even if you sell it) is still under that contract.

Regardless of the merits, it’s a considered purchase. Like home insulation, or a hybrid car, or a solar water heater. These are all considered purchases that will be made once, then amortized over years. By the time the customer is ready to buy again, they and you may be retired.

So why aren’t solar people offering “daily deals.” They could be a reduction in installation costs, or in the base price of the panels. Your email is going to lay out the deal for people – sign here.

Instead, it’s these folks involved in considered purchases who are less likely to use deal sites, and rely instead on referrals from existing customers for extra traffic.

Strange if you ask me.

 

 

 

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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog, Danablankenhorn.com, in 2007.

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