Daily Deals May Cause Long Term Side Effects for Hospitality

Groupon and other daily deal websites are now among Wall Street’s favorite companies to hate due to slowing growth, decreased valuation and accounting mishaps.

Thanks to Groupon’s public filings we’ve taken a peek at the inner workings of the daily deals business model, and some of it isn’t pretty.

Rather than turn this into another “Groupon is failing” article we’re exploring the relationship between online coupons and restaurants. We’ve talked about what digital marketers can do to expand on the daily deals concept. Let’s take a look at the long term side effects of relying on the daily deals model without support from other digital marketing programs.

Online coupon companies provide a turnkey approach to digital marketing that reaches a wide audience – so wide, in fact, that businesses are at times tempted to become daily deals dependent.

The Fast Food Analogy

Daily deals are a bit like fast food.

No, a Big Mac is not going to kill you. But if you take the Supersize Me route and eat nothing but double-decker burgers, your health will inevitably suffer.

Similarly with daily deals, running a Groupon will by no means hurt your restaurant brand. In fact, you’ll probably be satisfied with the short term results. But if you fail to initiate supportive digital strategies, your online marketing will ultimately fail.

Tell-Tale Side Effects of Daily Deal Dependency

Relying on one facet of digital

Relying solely on on online coupons like Groupon and Living Social can be dangerous. These outlets focus on email marketing – just one component of a successful digital marketing campaign. Social engagement (including social media marketing for restaurants), digital content, analytics, mobile and search lever other digital activities to make them more effective.

Short-term investment

Restaurants, bars and other hospitality-based businesses turn to daily deal websites for a quick marketing punch. But once Groupon or Living Social deliver the message to their proprietary lists, the campaign ends. You’re not too far from where you started – standing alone without an email list for furutre marketing efforts.

Foregoing brand development for one-time sales

With daily deals, the brand itself doesn’t get to say much of anything. Beyond the coupon itself, the customer is reading nothing more than clever rhetoric from daily deals copywriters. An important part of digital marketing is the “brand to consumer” relationship. So instead of letting a service do the talking for you, why not sound your own voice and develop your brand identity?

Has your hospitality business implemented tactics to support daily deals promotions? Share them in the comments section below. Interested in implementing other digital tactics? Overcome your digital doubt and dive into social media marketing for restaurants, and other businesses, with our white paper.