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The Do’s and Don’ts of Online Promotions

The Do’s and Don’ts of
Online Promotions

How to create a daily deal to benefit your franchise.

By Mandy Cole

In the past year or so you’ve likely seen a new type of promotion arrive in your inbox, on your Facebook news feed or in your Twitter stream, and it has probably sounded something like this:

Pay $10 for $20 to spend on food and drink at Quiznos
Pay $5 for $10 to spend on ice-cream at Cold Stone Creamery
These sorts of online promotional offers are commonly referred to as “Daily deals” and are delivered to the inboxes of millions of consumers worldwide every morning. Whether it is a promotion for a specific restaurant, a nearby car wash, or a fitness studio, each offer comes at a great value and encourages the recipient to try something new.
It’s not a surprise that consumer response to these sorts of online promotions have been extremely positive. In fact, a recent study from professors at Rice University and Cornell University found consumers have integrated daily deals into their everyday shopping behavior. The findings, which were released in September 2011, also revealed that daily deal users plan to purchase another offer within the next month and will buy deals regardless of whether they are small or deep discounts. Further, 87 percent of respondents in the study who had purchased a daily deal were first-time buyers, showing a great opportunity for new customer acquisition. This research makes it clear: consumers are looking to try new things and are purchasing online offers to do so, which provides franchisors with a great marketing opportunity.
When executed correctly, daily deals and other online promotions can serve as an effective, measurable marketing tool for franchisors to attract new customers and turn them into regular customers. How do franchise businesses go about crafting an online promotion that effectively meets their overall business goals, doesn’t denote the brand and also benefits franchisees? Here are a few to keep in mind.

Craft the promotion thoughtfully.
Daily deals are not a one-size-fits-all marketing opportunity. A $7 for $14 offer that worked well for a company like Baja Fresh might not makes as much sense for a brand like Valvoline Instant Oil Change. By choosing a marketing partner that works with your company and gets to know your business and your brand, it can craft a promotion that benefits your bottom line. Other keys to a successful promotion include:
Offer something compelling. Be creative and package products together in a new and interesting way to entice consumers to give your brand a try, while at the same time showcasing your business’s best dishes and services. If the franchise is known for its burgers, craft a promotion that includes a variety of burger options paired with a selection of appetizers that are new to the menu. Your marketing partner can be a great resource here as they have experience and data to show what works and what doesn’t in your industry.

Think about the upsell opportunity. Most customers treat daily deals and other online promotional vouchers just as they would gift certificates and hardly consider the voucher price to be the price they will ultimately pay. Since they know a portion of their bill is already paid, there is greater opportunity to upsell a customer on an added car treatment, spa session or piece of dessert, so keep that in mind. Further, structuring your promotion to include specific terms (i.e., one per person, one per table) will help your franchisees better capitalize on the opportunity to upsell and bring in added revenue.

Plan ahead. It is important to begin discussions several months before offering to run the promotion to ensure there is ample time to create a promotion that makes sense for all parties involved.

By crafting a promotion that can be redeemed at multiple franchise locations, the company has more opportunities to gain new customers. There’s a clear benefit to multiple location offers, but at the same time it’s vitally important that the franchisor trains franchise owners about what to expect well in advance.

Communication. Ensure your franchisees understand why the specific promotion you are running is beneficial to the overall brand and even more importantly, beneficial to their specific franchise. Daily deal promotions help bring new customers in the door, and it’s the job of the franchisee to provide those customers with a positive experience that keeps them coming back.

Training. Adequately train franchisees on what to expect and how to handle redemptions. The consumer experience is a reflection on the overall brand not just that branch, so it’s important that each franchisee knows what to expect. Encourage franchisees to offer new customers an incentive to return, ultimately turning their specific location into a habit.

Customer redemption. Merchants typically see the biggest spikes in the first three weeks after a promotion runs and then again in the last month before the offer expires. Ensuring franchisees properly staff their businesses during these time periods will help with the overall consumer experience.

Learn and Revise
There’s always an opportunity to improve on a promotion by taking into consideration the feedback of your customers. Read social media reviews and comments online, ask franchisees to distribute in-store surveys and most of all just listen to what people are saying. Next, work with your marketing partner to incorporate that feedback into your next promotion to make it even better.
When all is said and done, an online promotion like a daily deal is a win-win-win. It is a win for the franchisor by helping to promote a specific brand, a win for franchisees by helping to improve their bottom line and bring new customers through their doors, and a win for consumers who are getting to try new something new at a price they can afford. 
Mandy Cole is senior vice president of sales for LivingSocial, an online and mobile source for great local values and experiences.  She can be reached at 202-695-7000.

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