I’m taking a tangent break from SEO this afternoon to talk for a minute about the recent daily deals phenomenon. Destinations such as Groupon and Living Social pioneered a new era in online marketing that is doing more than just expanding, but also evolving into it’s own marketing channel.

Many people who have attended my workshops or Meetup.com groups in the past have had a glimpse at my Tactic Utilization table, an exhaustive spreadsheet of marketing tactics with score criteria. In 2011, my table expanded with 10 new columns that include popular daily deals websites.

With industry growth, comes people with opinions, and subsequently, daily deals review websites. Ross Cohen, picked up on the trend and built his own Daily Deals Website Reviews destination. I had a chance to speak with Ross briefly about the phenomenon. Ross made it clear that

“it is especially important in today’s economically difficult time, daily deal sites provide individuals a cheaper means of enjoyment: lavish vacations, delicious meals, and relaxing spa days (among much else) for highly discounted prices.”

But are daily deals websites helping or hurting businesses? And what type of people use daily deals websites?

The Pros of Daily Deals & Coupon Websites

Below is a list of reasons that daily deals destinations are thriving and can actually have value.

  1. Consumers get crazy deals (50% – 70% off typically)
  2. Businesses gets hundreds of new clients walking through the door
  3. It’s easy to spread deals through social media and sharing online
  4. Consumers are introduced to new brands, products and software

Let me know if I missed anything here.

The Cons of Daily Deals & Coupon Websites

What could possibly be bad about getting killer discounts and (for businesses) potentially thousands of new clients? Here are my thoughts, and hate me if you need to.

  1. The coupon culture is not your “buy once at a discount, and then come back and pay full price” culture
  2. Couponers can be moochers and live for the deal, it’s hard to build your client list on moochers
  3. It can actually cost a business thousands of dollars to do a daily deal (after the destination’s cut and the overhead)
  4. It’s difficult for a business to get into a daily deal program thanks to the demand
  5. It can feel awkward using an 70% off coupon, particularly if you know the business is already struggling
  6. The service you get as a deal redeemer is not often what you might expect

So, at least in my list, the cons outrank the pros. However, as I mentioned earlier, the industry is evolving. For example, destinations such as Dealster, a new daily deals website, offers businesses the opportunity to join a network of coupon and deal websites outside of just Dealster.com. They promote a Tweet in the region you are marketing to and allow for you to bulk upload deals you want syndicated across other deal websites.

The one-stop signup with Facebook is definitely a plus with Dealster and a few of the newer networks, but what I like the most is the new travel segment. Anyone can go to a site like Groupon and get 50% off a pizza or a $40 massage, but so far Dealster is the only website that actually offers insane travel deals and gadget deals at daily deal prices. I’m a tech geek, so you know I like the latter almost as much as saving a ton on travel.

Another evolution is the DIY daily deals software, such as that made by companies like Pageable.com, where business can host their own daily deals on their own website. The advantage is being able to participate everyday and to an audience of patrons (not prospects), so it’s more of a client appreciation campaign I suppose. The disadvantage is obviously limited reach. I recommend organizations doing both. Chucky Cheese’s for example offers members discounts and sends periodic offers via email, yet they use services such as Dealster and Groupon during slow periods to boost the number of people coming through the door (the hope is the upsell on alcohol and games I’m sure).

As these social-enhanced daily deals websites continue to evolve, I’m left wondering if the business can find a way to secure long term value from loss-leader type offers and still fully appreciate the customers (moochers or not) as though they were regulars. I guess only time will tell. In the meantime, I have my daily deals flowing to my personal account, which deserves a glance every morning for anything too juicy to pass up.

What daily deals do you subscribe to and why?