Online Daily Deals Bad for Business
The TechCrunch article Why I Want Google Offers and the Entire Daily Deals Business to Die is worth the read for entrepreneurs and businesses that serve them.
The article makes the point that despite daily deals online being the next big thing, small and medium-sized businesses need to beware of the pitfalls of this strategy. Consumers really have no idea how much small businesses lose on these deals. Here’s an excerpt:
I fear that customers will think that the generous discount is coming out of Google’s pockets or Internet magic, instead of the merchant’s pockets.
Google gets a big piece of the pie while the small business gets to lose some money on buying what is often bad business–customers only worried about the lowest price.
And here’s my favorite point from the article:
For businesses, the notion that deep discounting is the way to acquire loyal customers is equally dangerous. Competing on price doesn’t get you love; delivering high-quality products and services, engaging with your customers and creating unique experiences does. The best customers buy experiences, not price.