Tuesday, January 11, 2011

Groupon LivingSocial Problem -- Local Business Promotion Through Daily Deal Sites May Collapse Your Business - Part III

No Customer Address Gained – creating a customer database is an asset of any business, and hopefully one of the primary goal of the business owner. A storing customer database will give the extra-ordinary mileage to any business. But in case of daily deal aggregator sites, they can’t share their user information to any other business owners.

Proposed Solution – the best way to get their details, while they come into the merchant establishment.

Poor Employees Moral – while the business owners start advertisement campaigns through daily deal aggregator sites, immediately they get the huge sales leads, but after completion of the discount period they will come into the regular competition, not only that, during this period – employees will get very low tip with a great workload. As a result of this the performance and the moral will be definitely dropped.

Proposed Solution –
only possible solution is, ad-hoc basis temporary staffing.

It Encourage Needless Spending – generating revenue is the prime factor for every business. But provoking customers for needless buying is a bad business idea, Daily deal sites, usually offers unbelievable price to their customers. For example – a daily deal site offer 50% off in an excellent quality cell phone, it is very had to ignore the offer. Most of them have a very unique feature called – group buying. It is basically facilitates the customers to share the deal with their friends, family and coworkers. This feature simply creates pressure on customers. Because if he /
she do not accept the deal, then others can’t take benefit from it. This way those daily deal sites increases the needless buying habit on their customers.


Proposed Solution – hopefully, this is most complicated issue among all the issues. These only can possible if the business owners associations or business guilds and other promotional media aware the customer to resist the needless buying habits.

Rare Refund – it is very unfortunate reality of daily deal sites, they usually do not refund. Like BuyWithMe, Woot and many other daily deal aggregator sites has their own “No Refund” Policy. This "No Refund" policy is nothing but indicating the poor customer services and clarifies their view
towards acquiring the new merchants and shoppers. As well as, returning the products is equally difficult. This is one of main reason of the poor customer satisfaction.


Proposed Solution – This issue usually has two aspects. One from the customer’s aspect and another is – daily deals and business owners’ aspect. Before making any purchase, the customer must aware of the refund policies. Where as, the merchants and the daily deal sites need to clarify their product and price refund policies.

Tight Constraints on Merchants – daily deal sites usually beneficial for merchants for huge sales leads. On the other hand daily deal sites survive on the strength of their deals. If they are unable to offer the good amount of discounts to their customers, simply they loose their business. Therefore many sites push their merchants to reduce their price and offer a good discount to their customers. This push creates constraints for the business owners and creates an irrecoverable state of generating minimum profit.

Proposed Solution – this is completely depending upon the daily deals sites. They must stop to push the merchants to provide the discounts for their business sake.

One Bad Experience Ruins the Rest – as mentioned earlier, huge workload, weak manpower and poor business set up can’t handle the large sales pressure and related customer service. As a result of this, the customers will make comment of different online portals and that will affect the business reputation. One poor customer feedback can block numbers of potential customers.

Proposed Solution – Only good customer service can protect the situation.

Product Availability – usually all major daily deal sites like Groupon has a very huge targeted audience and customer base. As a result of this, the “Featured Product” will sold immediately. The business owners provide very few amounts of “Featured Products” for those sites for promotional purpose. This is one of the minor but very interesting part of the customer dissatisfaction.


Proposed Solution – by providing the good amount of “Featured Products” can rectify the issue.

Another "Time Killer" Online – searching the deals among the wide list of choices is very difficult. To search the perfect deal for the customer, they spend a huge amount of time to surf the daily deal websites. The “Time” they spend on the sites doesn’t return anything. The "Time" is not very little; the customers spend a significant amount of times on those sites.

Proposed Solution – the best way to get rid of this is – make a mailing list based on the product and service category and mail the daily deal to the customers with different distribution channels like – RSS, mobile content deliver, SMS and many other formats. So, that the customers do not need to surf the whole site to find their deals.

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