For a while, it seemed like I couldn’t go two days without hearing about some amazing deal one of my friends got on a daily deal site like Groupon or Living Social. Daily deals were all the rage, and businesses were raving about the enormous boost in business they had been seeing. However, as time has passed and many of those businesses have faded away, people have begun questioning the efficacy of these daily deal sites. Amidst all the debate, one thing has become crystal clear: Direct mail coupons are, and always were, much more effective at creating loyal, repeat customers. Why does direct mail have such a distinct advantage over online deals in the coupon world?
While daily deal sites seemed to flourish for a time, it is now well-known that daily deals have driven many a business into the ground because, rather than attracting new customers who then develop into repeat customers, these online coupons merely attract “deal hunters”. These deal hunters are loyal to one thing, and one thing only: Discounts. While businesses that utilized these daily deal sites usually experienced a boom in business after offering a coupon, very few of these new customers ever converted into repeat customers. They were busy hunting for their next deal, and were never prepared to pay full price in the first place. This translated into huge losses for these businesses.
While we have now seen this process often enough to know that any daily deal site should, at the very least, be approached with caution, it is interesting to note that this phenomenon has been largely absent in the world of direct mail coupons. While there is of course the occasional direct mail equivalent of our “deal hunter”, direct mail coupons have by and large translated into repeat customers for the businesses that utilize them, and therefore are usually very worthwhile investments. So why this dramatic divide between online and direct mail coupons?
When it comes down to it, online coupons and direct mail coupons attract very different consumer mindsets. When you offer a discount on a daily deal site, the visitors to those sites have come expressly for the purpose of finding a coupon. They know discounts are out there, and they derive pleasure and excitement from hunting down the best deal they can possibly find; they even take pride in their deal hunting abilities. These people inherently will not be those great, loyal customers that you are looking for, because they are not motivated by your products or services in particular. They are primarily attracted by the thrill of the chase.
Direct mail coupons, on the other hand, refocus your audience and might even remove this “thrill of the chase” aspect of coupon clipping. While daily deal sites only give you exposure to this “deal hunter” community, direct mail coupons actually give you the possibility to target the people who will be most interested in your products or services, whether or not they were expressly looking for a deal. While they might still get a thrill out of receiving a discount, they did not seek it out; you brought it to them, and they capitalized on it. These are generally more reliable customers, because they are still primarily motivated by what you are offering rather than the discount itself. By using direct mail coupons, you have essentially bypassed this “deal hunter” mentality that has cost businesses so much over the years.
If you are considering running a discount on a daily deal site, you might want to pause and consider whether or not direct mail coupons would make more sense for your business, (our guess is that they would!). Direct mail coupons have been proven time and again to be significantly more effective than online coupons, so why not go with what works? If you are interested in running a direct mail campaign, we would love to help! Please call US Data Corporation at (888) 610-3282 to find a marketing solution that works for your business.