'Deal Fatigue' Sets In

NO RATINGS
View comments: newest first | oldest first | threaded
Page 1 of 2   Next >   Last >>
smkinoshita
User Rank
Blogger
Re: Deal Fatigue
smkinoshita   9/26/2011 5:00:24 PM
NO RATINGS

I've learned a few things from running a flash deal with Groupon and Los Comales.  I don't want to get into the nitty gritty yet as the follow-up is where the play is really important, but I do have some thoughts about Deal Fatigue and flash deals.

To me, the most logical course of action for a daily deal will be to merge with the concepts of pay-per-click advertising.  After all, the flash deal is similar in that the advertising network only gets paid for results.

I can see the way the deal is implimentd changing however.  The current model places a great deal of the burden on the merchant -- it's the merchant who has to offer the deal, the merchant who takes the big cut on initial sales, the merchant who deals with most of the fallout.

Now, the deal network isn't all take -- it's extremely effective advertising and it gets new faces in the door.  I think even if every single deal was on point it'd still lead to deal fatigue however -- there's just not enough friction.

I think part of the solution will be to make deals harder to obtain, include some built-in follow-up, search and more engagement.  We'll have to see what happens.

tinym
User Rank
Evangelist

Buying what you don't need? Oh never!!  Who would possibly market for the impulse buy?  That's another draw-back of the daily deal...buyer's remorse.

cmophil
User Rank
Proponent

This is true & I share the same sentiment. The worst part of subscribing to 2+ of the deal subscriptions, you end up either seeing the same thing multiple times or (even worse) you buy stuff you do NOT need.

John Barnes
User Rank
Blogger

I'm wondering how much of the daily deal and special deal low prices are a way to pull the average price down -- i.e. drop prices without doing it officially.  We're in a deep, messy, nasty intractable recession, but some of the signs of a real classical depression have so far not appeared -- notably falling prices.  Maybe this is how prices can fall without looking like they're falling.  In which case the limited time group special deal may only be in its infancy.

Scott raised a good point and Keith seconded it: the next step is probably some kind of auction pricing, where in effect you say "I want this and I'm looking for a really good deal on it" and suppliers bid for your money.  Fixed pricing was always really just a matter of information cost -- if all the cans of beans  in the supermarket are the same price, period, you don't have to pay the cashiers to know how to haggle about them.  Information cost is still plummeting every year.  Maybe eventually your bonded AI will go meet the producer's bonded AI over virtual tea and a game of chess, and then discuss price through a few thousand iterations before coming back to you and the producer and saying "This is the best deal you can both afford."

tinym
User Rank
Evangelist

The novelty of the limited-time deal has worn off for me. I want overall lower prices on the things I buy most. I may be different than the rest of my demographic. Do you think the deals will continue or simply morph into something else? I think there are too many sites imitating Groupon. I don't want to get emails from all of them everyday.

John Barnes
User Rank
Blogger

It's a well-known result in price theory that when there are enough "specials" out there,  the regular price starts to decline because people don't like to feel that they're paying extra, and the markup for regular has to get smaller.  This may be another case of what Schelling called "The Inescapable Mathematics of Musical Chairs" -- in a game between the worst musical chairs players in the world (assuming they can play the game at all) there will be one winner.  In a game between the best, there will be one winner.  Train the worst until they're as good as the best, and there will be one winner.  Similarly, as deal-finding has become faster, easier, overall better, and more and more people have access to it, you may be doing the equivalent of improving the players in musical chairs: better for the individual but the game will have the same result, and over time, the individual's relative benefit declines.

Ryck
User Rank
Evangelist
Re: Future of the Daily Deal
Ryck   8/31/2011 12:06:30 PM
NO RATINGS

I also don't think the daily deal is done either.  If that were the case, then coupons and weekly flyers would already be extinct.  That being said, the daily deal industry will need to morph to stay relevant.

smkinoshita
User Rank
Blogger
Re: Deal Fatigue
smkinoshita   8/31/2011 11:11:30 AM
NO RATINGS

Agreed Ryck.  I think a more engaging network will be part of a key factor.  People need more than to be sent a deal, they need to provide feedback on said deal.  While it shrinks the size of the network, it improves its quality which will improve the network's retention.  Every deal that's uninteresting increases the chances that the next deal will be ignored and the network will eventually lose a member (even if the person never formally unsubscribes).

 

kdawson
User Rank
Blogger
Re: Deal Fatigue
kdawson   8/31/2011 11:10:58 AM
NO RATINGS

if these companies somehow knew what we really wanted or needed

That is the holy grail, isn't it? But even with all the profiling and targeting and tracking available today, I don't see a lot of evidence that those offering deals are making use of it. It's almost like everyone in the game is panicked that the music might stop, so they have to shout and spam offers all over... which only makes it more likely that the music will indeed stop.

smkinoshita
User Rank
Blogger
Future of the Daily Deal
smkinoshita   8/31/2011 11:00:36 AM
NO RATINGS

I don't think the daily deal is done, not by 2016 and not later.  I do think it will change shape a few times though.

After all, as long as consumers and businesses get utility from the networks, the networks will be valuable.  So it's more a matter of who can manage their resources while providing the best features until the others die out.

No easy answers here, and I think the flash deal industry is going to play out like a war.

Page 1 of 2   Next >   Last >>


More Blogs from Keith Dawson
Malware as ad campaign, the further woes of Do-Not-Track, and more.
Who showrooming affects, algorithmically amplified video, and more.
I know that creepy line is around here somewhere.
Bit.ly's link insights, Twitter's treatment of marketers, and more.
A look back at The CMO Site's polls this year, on subjects including millennial marketing, the effectiveness of social media marketing, and CMO/CIO relations.
leadership reports
Getting the Most from Mobile Marketing
The CMO Site, The CMO Site
The proliferation of smartphones and tablet devices presents new opportunities and challenges for marketers to reach customers where they are and when they’re ready to buy. Apps, the mobile Web, social check-ins, geofencing, and mobile ad standards are among the tools marketers need to master in this new world. Learn how to use new mobile technology effectively and avoid its hazards.
LEARN MORE
CMO videos
GM's Customer Focus
How GM uses customer metrics and analytics.

2:34

(6) comments
Del Mar Races to Win
How the racetrack uses social and mobile marketing

1:54

(6) comments
Social Media Resolutions
Ideas for social media marketing in 2012.

4:25

(41) comments
My Viral Tweet
What marketers can learn from a tweet.

2:54

(9) comments
Trikkes & Marketing
Retailers face three options in 2012.

3:41

(11) comments
Mobile Marketing Is Hard
Meet Amazon.com's Price Check app.

3:01

(1) comment
Neither Snow Nor Rain
The USPS plans to curtail mail delivery.

02:18

(6) comments
Careful With Foursquare
Mitch Wagner trips over his own feet.

04:26

(4) comments
Community Is 'Where It's At'
If brands want their names to stick they need to ...

2:27

(11) comments
Twitter Upgrades
Twitter is now more useful for brands.

2:42

(2) comments
Fonts Mean Brands
Mess with your font at your peril.

3:12

(6) comments
CMOs Need More Customer Time
CMOs are missing the opportunity to get info ...

2:21

(1) comment
Behavioral Ads
Marketers are losing on behavioral advertising.

2:54

(9) comments
'Moneyball' Marketing
"Moneyball," the new Brad Pitt baseball movie, is ...

3:00

(2) comments
twitter feed
The CMO Site Twiter Feed
like us on facebook
The CMO Site Linked-In Group Ad
Charlotte Blank
General Motors: Keeping the Customer at the Center

2|29|12   |   2:34   |   (6) comments


How the carmaker uses metrics and analytics to track all the proliferating information streams it has on customers, from social media, real life, and more.
Craig Dado
Del Mar Races to Win at Social, Mobile Marketing

2|15|12   |   1:54   |   (6) comments


Craig Dado, senior vice president of marketing for the Del Mar Thoroughbred Club, describes how the racetrack uses social and mobile marketing to attract a younger, female demographic.
Mitch Wagner
Social Media Marketing Resolutions

1|25|12   |   4:25   |   (41) comments


Ideas for boosting B2B social media marketing in 2012.
Mitch Wagner
My Viral Tweet

1|18|12   |   2:54   |   (9) comments


What marketers can learn from a tweet that went viral.
Mitch Wagner
Trikkes & the Future of Retail Marketing

1|9|12   |   3:41   |   (11) comments


Retailers face three options in 2012: Go low on price, go high on service, or go out of business.
Mitch Wagner
Looking 5 Years Ahead in Marketing

12|21|11   |   3:51   |   (4) comments


IBM made five predictions for the future in its annual 5 in 5 projection, and three of them are relevant to marketing.
Mitch Wagner
Mobile Makes Retail Marketing Harder

12|19|11   |   3:01   |   (1) comment


Amazon.com's recent Price Check app heralds the beginning of a new era of creative destruction for brick-and-mortar retailers.
Keith Dawson
Neither Snow Nor Rain

12|13|11   |   02:18   |   (6) comments


As the US Postal Service prepares to curtail mail delivery, marketers relying on first class will have to plan more carefully and, over time, move into other channels.
Mitch Wagner
Don’t Embarrass Yourself on Foursquare

12|12|11   |   04:26   |   (4) comments


Editor-in-chief Mitch Wagner trips over his own feet trying to use a Foursquare discount, in a tale with a lesson for brands.
CMO Video
Community Is 'Where It's At'

11|15|11   |   2:27   |   (11) comments


Is a massive, three-day industry event featuring A-list speakers like Bill Clinton and Malcolm Gladwell the right approach for a company seeking to generate awareness of its brand? Steve thinks that goes part of the way, but if brands want their names to stick they need to build communities.
Mitch Wagner
Twitter Upgrades Activity Streams

11|9|11   |   2:42   |   (2) comments


Twitter improved its home page to make it more useful for brands looking to find influencers to engage with.
Keith Dawson
Fonts Mean Brands

10|31|11   |   3:12   |   (6) comments


Once you associate a font with your brand, you mess with it at your peril.
Mitch Wagner
IBM Study: CMOs Need More One-on-One Customer Time

10|20|11   |   2:21   |   (1) comment


CMOs rely on aggregate data for customer preferences and are missing the opportunity to get one-on-one information through social media and other resources, according to a study of 1,734 CMOs conducted by IBM. Watch a Webinar presenting the findings, and get a copy of the report for yourself.
Keith Dawson
Behavioral Ads: Getting Back in the Conversation

10|18|11   |   2:54   |   (9) comments


Surveys show that marketers are losing the mindshare battle on the benefits of behavioral advertising – and they need to rejoin that conversation.
Mitch Wagner
'Moneyball' Marketing

10|14|11   |   3:00   |   (2) comments


"Moneyball," the new Brad Pitt baseball movie, is one every marketer should see. It's not just about relying on metrics and analytics over gut feelings, it's also about relying on the right metrics and analytics.