Here is a plausible thought: it is possible to have a really great deal that is in demand and still have poor sales coming from it because of obstacles that exist along the way after your visitor has decided to purchase the deal, e.g. laborious checkout process, checkout surprises like large shipping costs (for shipped products), and, yes, ridiculous fine print – ridiculous in terms of quantity and nature. A good practice to adopt is to be a daily deal consumer yourself, especially for the goods and services that you already routinely pay full price for, and try to understand the mentality and behavior of daily deal consumers.

Consumers generally only start reading the fine print of a deal – which, needless to say, is a chore and a potentially-killjoy activity – when they have somewhat made up their mind to purchase the deal. If an item in the fine print is not essential, remove it. Expiry dates are common and understandable, but some of the most common party poopers are: 1) “weekdays only” or other time-limited terms, 2) minimum purchase required, 3) venue restrictions, 4) item restrictions (e.g. only applicable to certain menu items in restaurants), and 5) unreasonable “while stock lasts” restrictions. The more fine print a deal has, the less freedom and thus more stress the consumer has in using the voucher. In a way, it feels as if the merchant and the daily deal website are not sincere about welcoming new customers to try out their offering.

To instill some fine print discipline, daily deal websites can try sticking to some internal rules. For instance, a daily deal website owner can vow to only include a maximum of 5 fine print per deal or swear not to include a certain type of fine print (e.g. minimum purchase). No consumer likes fine print, and, to some extent, merchants do not necessarily reap a net benefit by having them. It may even serve as a competitive advantage; while your competitors are incorrigibly saddling their deals with an absurd, stress-inducing amount of fine print, you are making your deals easy to understand at a glance and also putting forth a sincere offer that is not ridden by terms that consumers may not notice before purchase.

Have we seen deals with a large amount of fine print do well across our network of hosted sites? Certainly. A low volume of fine print is neither a necessary nor sufficient condition for a deal to sell well, but it definitely is a factor in favor of increasing sales. The general rule of how to sell things is 1) sell something people want and 2) make it easy for people to buy it. Of course, if you are not sure whether something has demand, do not bother about tweaking the fine print etc.; it will not help. Sometimes, however, your deal may be so wanted that your buyers would be willing to tolerate a certain amount of fine print beyond the ordinary – use your judgment to decide whether your particular segment of buyers would be bothered by the fine print vis-à-vis the uniqueness of your offer.

Groupon’s extraordinary growth as a daily deal website is truly enviable for any actual or potential competitor. In fact, it would be seriously tempting to copy any externally-observable tactic employed by Groupon to try to replicate just a fraction of its phenomenal success. Interestingly, one may even say that our daily deal platform, Zuupy CrowdDeals, exists solely to service hundreds of individuals and small businesses whose raison d’etre is to clone Groupon itself.

The truth is that Groupon can get away with a lot of things because of its deep pockets and humungous (read: 9-figure) subscriber list. It can afford to experiment and implement a number of different things, including having a gigantic sales force to hard-sell merchants, having less-than-attractive/tired website designs, producing over-enthusiastic copy, and actively running deals across a ridiculous number of cities. Groupon is like the Amazon of the daily deal industry – it might not necessarily be wise to copy their every move given how different their circumstances are.

Just as you would not run a minimart the way Walmart or Tesco runs their hypermart, you should not run your fledgling daily deal website the way the market leader runs it. You can certainly draw inspiration, but it has to be backed by sound justification – and the only sound justification is really your subscribers/customers saying that they want whatever you intend to copy. Copying blindly without any indication or evidence that the demand for whatever you are copying exists is a waste of time, money, and resources. Find out what your subscribers want by talking to them. When you are small, you probably cannot do things autonomously and get away with it (a la the way Facebook frequently changes its layout and breaches its privacy policy); you need to bend over to some extent to the miniscule number of people who miraculously even care about your daily deal website.

The truth is that all Groupon did was validate the business model (and even then, how validated the business model is remains to be seen given the infancy of the industry). Copying the business model itself may be prudent – after all, if it has demonstrated a clear path to profit, it would be not prudent not to copy it – but copying its design, branding, marketing, and even deal inventory may not be effective, because you have a different set of subscribers with different demographics who have different wants and needs. You probably do not control the eventual make-up of your subscriber list (assuming they are opt-in subscribers, which they better be), as much as your positioning hopes to achieve a certain demographic composition. Design, branding, and copywriting follow who your subscribers and customers are, not vice-versa.

If you are going to copy Groupon with no additional innovation whatsoever, you will not succeed, not even marginally – because Groupon will always be a better Groupon than you can hope to be. You need to be better in some aspects, be they pricing, customer service, value-added content, or niche targeting, in order for consumers to even consider patronizing your daily deal website. Would you rather buy from Groupon or BestSuperSavingsDailyDeals? I know that Groupon will be the safe choice, and, unless BestSuperSavingsDailyDeals can offer something Groupon does not have, I would be better off sticking to Groupon. So would millions of others.

Last week, I have suggested that contests and giveaways may be one of the most effective ways to build leads and drive signups for new daily deal websites. While it is becoming an increasingly common tactic, running your own contest or giveaway can still help you collect email addresses, Facebook fans, and Twitter followers, if you can sufficiently differentiate your marketing campaign to make it engaging and inherently viral (we will talk more about virality). Today we should be focusing on sweepstakes/lucky draw contests, because they are relatively cheap to run and easy to manage; plus, they are also the most eye-catching form of contest and most easily understandable at first glance.

The keys to running a successful sweepstakes/lucky draw contest are 1) a prize people would otherwise purchase with money if not presented with an opportunity to win it for free and 2) rules and parameters that are in line with your business objective – to drive signups and enhance brand awareness. Without further ado, let us get down to the best practices:

1. Big prize(s) with smaller chances to win trumps small prize(s) with bigger chances to win
If I offered you two opportunities: a 5% chance to win $10 or a 50% chance to win $1, which would you choose? Most people would likely go for the former (do not just take my word for it – Wikipedia says so too), because the initial investments for both cases are equal (no risk) yet the potential returns are much bigger in the former; the risk-reward ratio is much lower in the former. Big prizes are always more eye-catching anyway – in a contest, the magnitude of the prize is the focal point, the odds of winning are often treated as some form of fine print, thus big prizes encourage both sharing and participation. If you are unconvinced with the big-prizes-small-odds approach, you can certainly try the hybrid approach.

2. Have a built-in viral loop for your contest
To run a successful sweepstakes/lucky draw contest requires mass participation, and mass participation is only possible if participants themselves are incentivized to share your contest with others, be it directly or indirectly. All online contests and related marketing gimmicks require some form of viral marketing to keep awareness high after the initial marketing push by the contest purveyor. One popular method that we have come across in the network of daily deal websites that we host is to tie draw events to a minimum number of participants or Facebook Likes: e.g. “10 iPhone 4Ss to be given out. There will be 1 draw for each 100 participants (or 100 fans on our Facebook Page) achieved before the deadline. Limited to the first 1,000 participants only!” Participants have the incentive to share contest to increase the chances of a next draw event, driving signups and participation.

3. Facebook Likes as a method of participation
A related tactic that you can use with tactic 2. above is to say that winners for your big prize will be drawn from the pool of last 1,000 people who have Liked your Facebook Page (a chronological order of people who Liked your Facebook Page is visible from your administrative dashboard of your Facebook Page). This parameter will ensure that sharing is compulsory and that sharing and participation go hand-in-hand. An added bonus is that some people may be perceptive enough to Like and Unlike your Page frequently in order to always end up as one of the latest fans, ensuring that a post about your Facebook Page stays fresh and high up on those people’s friends’ News Feeds.

4. Conduct draws at regular intervals
Instead of saying that a draw will be conducted at random once a certain number of participants or Facebook Likes is reached, say that a draw will be conducted for the exact 100th, 200th, 500th, or 1,000th participant or Facebook fan. Crafting the rule this way may not encourage participants to join in when they are far from the draw interval, but it will definitely drive people to share your contest and your brand so that they have a chance at using other participants to get closer to the draw interval, at which point they themselves would opportunistically put in an entry. However, when hundreds or thousands of people think this way, interesting things happen.

5. “Last participant at closing time wins the grand prize”
This parameter should only apply to sweepstakes/lucky draw contests where multiple participations are allowed. Of course, you would need to craft the rules in such a way that their last entry can only count if it is separated from their second last entry by, say, 5 entries not belonging to them – otherwise, their last entry will be bypassed in favor of the second last entry that fulfills the rule. This rule will not only increase participation but also somewhat force sharing.

As with all marketing tactics out there, your mileage may vary. You should be able to craft contests for your intended or existing audience to match their expected behaviors in terms of the prizes that they care about, their level of adventure, their Facebook savvy, their Twitter savvy, etc. Of course, never forget that you need to give an initial marketing push to get the word out on your newly-made contests; nobody can participate unless people know about it. Give these tactics a try today!

P.S. If you want to start a daily deal website and conduct a sweepstakes/lucky draw contest right away to build leads, you can sign up for a free, no-credit-card-required, 15-day free trial account at our daily deal platform: http://www.zuupy.com. Have a good weekend!

...you cannot build a large, targeted subscriber list. The process of amassing a group of people interested in your business concept, whether they are email subscribers, Facebook fans, or Twitter followers, is non-negotiable and should always precede your launch. There are rarely any effective shortcuts for this process, including importing a list of email address from elsewhere, buying Facebook fans and Twitter followers, and promoting your new daily deal website to an existing community in which you already wield influence. Nothing beats building an opt-in subscriber list from the ground up.

The reason that most of the abovementioned shortcuts fail in converting “leads” into buyers is simple: a betrayal of expectations. No doubt you may be importing an email list that is an “opt-in” list, but consider the fact that one man’s opt-in list is another man’s bulk mailing list. If I opted in for newsletters from Her World magazine, I am not expecting (and would be quite furious) to receive offerings from Cleo magazine. Buying Facebook fans and Twitter followers to look credible is simply wasteful, because: 1) it is way too easy to spot fake fans and followers, and 2) nobody actually cares about the number – what they really want to see is that the brand owner is willing to and constantly engages her brand enthusiasts; the fan or follower count is a mere symptom of responsible brand ownership.

Occasionally, “expectation betrayal” applies to promoting deals to an existing community in which you wield influence, e.g. promoting make-up deals to your make-up tips blog readers, though we have seen mixed results when this type of promotion is done. One of our customers did very well with this (this one, in particular), but others have only seen mediocre results. If you already have access to an existing community that trusts and likes you, this tactic is worth a shot.

However, a genuine opt-in list almost always results in good sales, assuming that you have been talking to them personally and getting to know what deals they would want to buy. The biggest mistake when deciding what deals to sell is possibly selling deals based on what merchant-supplier relationships that you have (vendor convenience) rather than what deals your subscribers say they would buy (demand fulfillment).

How important is lead acquisition anyway?

As a growing daily deal platform that hosts hundreds of daily deal websites, we have witnessed time and time again how daily deal websites usually fail, mostly because of marketing failure, or, more specifically, failure in lead acquisition. Acquiring leads is hard. There are many products in the market that cost a bomb targeted at just acquiring leads using gimmicks like social media contests, e.g. Wildfire, Offerpop, etc. – people not only pay money but also pay good money to acquire genuine leads. (Coincidetally, our daily deal platform, Zuupy CrowdDeals, also offers this feature in the form of a free deal/lucky draw, which has already proven to be effective in acquiring leads in a fraction of the usual cost – a real-life case study will be coming very soon.)

So what is the right way to acquire leads for new daily deal websites?

As implied by the above paragraph, I am inclined to say that contests, lucky draws, and giveways are almost the quickest and most effective way to build leads for a new daily deal website. Invest some money into crafting an attractive lucky draw offering (like this one), and post it on Facebook, Twitter, forums, and blog comments regularly, and you should do rather well. As long as your offering is something relevant to the audience that you are targeting (e.g. shopping vouchers for women), your subscriber count should start to authentically go up, and so should your sales.

Marketing is possibly the hardest part of running a daily deal website. There are two parts to marketing a daily deal website: 1) sourcing for merchants/deals and 2) getting subscribers and social media followers in order to build traffic. A great deal of the daily deal sites that we host are operated by owners who are aware that differentiating themselves from Groupon and LivingSocial is a business priority – and they are right. Marketing may be a good place to start differentiating.

The key idea that I am putting forth in this article is to market through channels that are less utilized by your established competition. The most obvious tactic is to use offline marketing more where online marketing has been used to death, and vice-versa. In other words, start thinking of ways to use offline marketing to reach your end consumers and online marketing to reach your merchant suppliers.

Using offline marketing tactics with your end consumers make sense, because, at any given time, a bigger proportion of them are likely to be at eateries, supermarkets, shopping malls, the streets, bars, etc. than behind a computer burning hours online. The product that you are selling is to be consumed offline anyway (by the way, the “product” is the voucher, not the underlying goods or services). So going directly to them may be an opportunity to see what they are like in real life, so that you can source for deals based on their consumption patterns. Heck, you can even talk to them to understand what they are like. That is something valuable that online marketing cannot offer.

Here are some offline marketing tactics that you can use with end consumers: http://www.bootstrappingblog.com/50-guerrilla-marketing-tactics-you-should-be-using/.

As for online marketing with merchant suppliers, one possible way to do it is to put up a page on your daily deal website that shows off your past successes in bringing in customers through the door by the dozens as well as the burgeoning size of your subscriber list. Selling to merchants is a B2B affair, thus ROI marketing needs to be your core strategy. You can then promote your page in forums in which your merchants participate, which would be easy to identify if you begin with a niche. If you do not begin with a niche, you are possibly committing a fatal mistake already.

What if you are new and you do not have past success stories on which to leverage (yet)? There is no silver bullet here, but working from within your current network may be a good idea. Offering a limited-time substantial discount may be another, sprinkled with the sweet promise that your subscriber base is “healthily growing.” Call me radical, but being a decent human being and asking nicely for a pilot deal may also be a viable strategy to employ.

As the saying goes, “marketing is a tax you pay for being unexceptional.” The fact is that marketing becomes a whole lot easier when you start with a compelling idea that it sells itself, i.e. niche targeting. When you claim to focus only on a certain geographical area, interest group, age group, or gender group, people within that niche feel special and are more likely to be captivated by your basic premise. The belief that niches are limiting is false and silly – nothing stops you from leveraging upon the success within your initial niche to enter another niche market.

Ultimately, marketing tactics may allow people to know about your business; getting people to care about it, however, starts earlier – much earlier. It begins at the conception phase of your business.

Paul Graham, co-founder of Y Combinator, once said something to the effect of “you succeed when you avoid all fatal mistakes that you can make along the way;” success merely results from the absence of fatal mistakes and blunders. The same principle applies in the daily deal business. Drawing from our humble observations of how hundreds of daily deal websites are (and were) run on our daily deal platform, we have compiled a list of the key mistakes in order of fatality to avoid when operating a daily deal website:

1. Not selling deals that your subscribers want
This point may seem obvious, but a substantial number of inexperienced daily deal site owners tend to sell deals that they think their subscribers want, not what their subscribers actually want. In fact, some of the deals might as well not be sold – subscribers probably do not want them even if they were free. The only way to know what subscribers really want, as we have noted in the past, is to talk to subscribers. Begin with a basic premise for the daily deal business (e.g. beauty services for female working professionals), get the first few subscribers to stay in the loop with your business (e.g. providing an email address, following you on Twitter, etc.), and then regularly drop them a personal message to ask them what they want. The daily deal business is too competitive to carve out an offering based on hunches and untested hypotheses.

2. Not marketing the business and its deals prudently
The biggest mistakes always happen when daily deal site owners attempt to take marketing shortcuts by purchasing a non-opt-in mailing list and essentially spamming people with deal offerings or by buying Facebook Likes and Twitter followers to look credible from the outset. Tactics like these almost always fail – it is not worth the money, time, and personal morale to experiment. There are better marketing tactics, such as running free deals/lucky draws to garner opt-in email subscribers, Facebook Likes, and Twitter followers or using a referral program to mobilize your existing customer base. Providing relevant content via social media channels to existing brand enthusiasts, even if it is as simple as posting an article to a third-party website, can also work for well-defined niches (see content marketing).

3. Launching with niche and/or expensive deals
The first few deals need to be simple, general, and at a low price point, because consumers are still trying to learn to trust your daily deal website. The pilot deals that tend to do well include food and beverage deals and gift card deals. A price range that consumers can generally stomach for the first few deals probably lies below US$20. These starter deals tend to result in not only a higher number of transactions but higher deal revenues, at least in the infancy of your daily deal business. Here is a bonus point: they also serve as a great morale boost.

4. Not focusing on the bottlenecks of the business
It is better to have the different aspects of the business to be “good enough” than to have a few aspects to be “excellent” but many more to be “bad.” Knowing where the bottleneck of your daily deal business is is a crucial skill. For instance, some daily deal site owners insist on concentrating their efforts on design and look and feel, when the true limiting factor is that the existing subscriber base is just not large enough to sustain a business. If you plan a strategy based on rectifying major weaknesses instead of continually building strength, especially in the starting phase, your business has a better chance to survive and flourish.

5. Not having a brand identity or resorting to copying
Copying wholesale or even a substantial portion of another business rarely works, because different businesses have different resources, different customer bases, and different stages of development at any given point in time. The only thing that is prudent to “copy” is what your subscribers and customers say (even then, analyzing feedback is an important skill); be aware of what competitors do, but it is probably ineffective and unethical to copy their design, offerings, and business model. Related to copying is the lack of attention given to establishing a brand identity. As mentioned in point 1, picking a niche is absolutely necessary for subscribers to have any sense of identification with your brand, and picking an obscure or small niche is still better than not picking one at all. Not picking a niche is a surefire way of joining the thousands of daily deal websites out there and being just “one of them.”

6. Not launching the best deals during a weekend
This point is completely anecdotal, but our best-performing deals are all weekend deals. There could be something about the weekends that puts people into a buying mood. If anyone else has a contrary experience with deal timing, do comment below so that everyone can learn from your experiences.

7. Giving up and not putting in sufficient effort and resources
This point is not meant to be pedantic. Some daily deal site owners have illusions of making substantial revenue by working part-time on the business and letting it run auto-pilot. Automation is definitely an achievable goal, but this same class of daily deal site owners is also reluctant to invest money into developing marketing channels or outsourced workers to sustain this target state of automation. Unfortunately, online marketing is an activity that is increasingly impossible to solve with money alone; any successful business owner knows that hustle and toiling are necessary at the start, if not at the mature stage of the business.

The bad news is that almost all daily deal websites that we have seen commit at least one of these mistakes. The good news is that most of these mistakes are rectifiable if taken care of in time. Extract yourself from your daily deal business once in a while and do a diagnosis of what is wrong or what can be done better – that is a free yet scalable/high-impact activity that you can engage in to improve your business prospects tremendously.

The daily deals industry is an interesting one, which attracts many players to it (some say too many), causing the space to be characterized by cut-throat competition. Crowdedness is not necessarily bad: it is arguably easier to stand out in a crowded market with no dominant player in your niche (e.g. handmade jewelry) than to stand out in a market sparsely populated by a few dominant players whose names are synonymous with the industry (e.g. search engines). As a daily deal platform hosting hundreds of daily deal websites, we have seen – more often than we can count – high-quality daily deals that are not fully-optimized and thus do not reach their full sales potential.

Assuming that you are selling something that your market wants, here are some suggestions for daily deal optimization:

1. Display more images and videos
One of the easiest ways to improve a daily deal offering is to display more non-repetitive images and videos. Images should show different aspects of the deal (e.g. a spa package might include a facial, a herbal massage, and a steam bath; include those individually). You can also show video testimonials as well as explanatory clips. There is often too much text and too little media.

2. Display images with people having fun
What is more enticing: a panoramic view of a theme park or a picture of a happy family riding a rollercoaster? Faces usually do the trick.

3. Inflate that purchase count
This practice is ethically questionable but less questionable when it comes to its efficacy in increasing sales. You can customize your website to show a fake “150 people have bought this deal” line to serve as social proof and encourage buying. (We give the option to our customers to use this feature or not, thus shifting the ethical dilemmas to them!)

4. Use a shorter active time period
Deals with, say, a 5-day or 7-day open window might as well not have a countdown timer. The shorter the active time period, the more urgent and scarce the deal seems, leading to impulse buying.

5. Minimize the number of clicks required to reach the payment page
Some daily deal websites require a subscription before bringing you to their deals. Others require registration. While it is controversial whether those tactics increase sales, they certainly do increase the number of steps required to reach the checkout page. Generally, that is not good. Why not let visitors check out as guests? Why not allow a quick checkout, i.e. require just one click to go from the deal page to the payment page – bypassing the shopping cart?

6. Make your deals affordable
Price is correlated to value, yes, but consumers often see things in terms of absolute dollar value without much regard to the intrinsic or even perceived value of the item in question. Making your deals affordable means that you start by selling low-ticket deals to build your reputation (and morale) and slowly working your way up to the three-figure and four-figure deals.

7. Engage your visitors by providing discussion/commenting outlets
As much as you would like to provide all the relevant information pertaining to that deal, your visitors might still often have questions of their own. Start the ball rolling by putting up a simple “talk to us and we will respond in hours” notice. Let them consult one another or publicly ask you, the daily deal site owner, questions. Be responsive when that happens!

8. Minimize the number of side deals
More often than not, less is more. An overly-large gamut of choices (anything in the 10-20 range, really) puts your visitors in a browsing or exploratory mood, not a purchase consideration mood. Focus can help to sell deals.

9. Avoid unprofessional design
It is needless to say that your logo should make anyone who sees it want to trust your company. Try not to use too many sharp edges in your design, use sans-serif fonts, avoid clashing or saturated colors, have a consistent branding throughout the website, etc. In short, recommend UX Movement (http://www.uxmovement.com) to your designer.

10. Market your deals often
This suggestion is obvious. Yet consistently marketing one’s deals is not a common practice, because most people are afraid of being seen as spamming or hard-selling. Others are afraid that they will never be able to recoup their lost marketing dollars the more they advertise. The only problem is that nobody will buy your deals – no matter how good they are – if they do not know about it.

Of course, these suggestions are just hypotheses, which can at most be used as bases for testing. The only practical way to know what works and what does not is to perform A/B testing. If you have experience running split tests on any of the suggestions above, do share your results and findings in the comments section; we can all learn something!

Daily deals are a competitive business; you either differentiate or die. Operational costs are not exactly on the low side, and your sales may not be adequate for you to turn a profit. Below are thus some ideas for revenue generation:

1. Bait-and-switch
Use loss leaders for your first few deals and sell a good deal at way below market price. A good deal is one that is general and low-ticket enough to apply to just about anyone (e.g. gift cards). The aim here is to spark off some initial activity, short-term word-of-mouth marketing, and create awareness of your daily deal website. Your “losses” should be treated as a marketing investment; each subscriber obtained has a lifetime value after all that you can tap on to get future sales. Rushing to make a profit on the first deal may not necessarily be a good idea. Not many daily deal websites use bait-and-switch yet, so it might be a good idea to experiment.

2. Free daily deal vouchers
The only thing better than a 80%- or 90%-off voucher is a free one. Give away a few complimentary vouchers on good deals (see above) on a lucky-draw basis, but collect subscribers’ email addresses upfront in exchange for participation in the lucky draw. The classic “give us your email address so that we can notify you if you are chosen” usually works well.

3. Daily deal aggregators
Daily deal aggregators (see a list here) are websites that collect the best deals from a whole database of daily deal websites and collate them into one daily deal email. Certainly, your deal will appear side-by-side with your competitors’ deals, but, if your deals stand out, your competitors’ deals will be rendered as mere noise. Best of all, most daily deal aggregators are free to use and require no manual work, thanks to RSS/XML data feeds. The only pitfall is that most daily deal aggregators use a different XML deal format, despite the Open Deal Format movement. Fortunately, good daily deal platforms have capabilities to provide different feed formats for different daily deal aggregators. ;)

4. Referral program
Make your first few customers who are enthusiastic about your brand your voluntary sales force. Give them discounts for successfully referring a friend who purchases something; CPA is a better model than CPC. The key here is not to be stingy with the referral rewards. If increasing the rewards by 100% has the potential of increasing the number of referrers by 200%, the referral program is likely to profitable. The key is to see referral discounts as a marketing investment.
P.S. If you already are a Zuupy CrowdDeals customer, our referral program is coming very, very soon. We promise!

In conclusion, daily deal websites that want to survive must understand this growth sequence: awareness first, sales later. With no brand awareness or brand familiarity, people are unlikely to buy anything. Think of brand awareness as an initial-investment asset that can be exploited down the road to produce consistent sales. It is unlikely that a newcomer to the daily deal industry or, indeed, any industry, will be able to skip levels. The key takeaway is basically to do whatever is necessary to get considerable awareness first and then focus on profit strategies.

Facebook Deals is history. Groupon is declining. Google Offers is not exactly going places. In short, the luster and explosive growth of the daily deals industry are finally waning; the industry may be approaching some form of maturity or stabilization.

As a daily deal website owner, you may be tempted to ask, “Is there still space left in the US$4 billion industry for me to survive and, heck, to grow?” The answer is probably yes, but a differentiating strategy is probably needed.

Here are a few suggestions:

1. Position your website as a way to learn about new places to have fun. It is sometimes an unwarranted assumption that daily deal consumers are cheapskate bargain hunters who will only buy if the item in question is sufficiently cheap. The term “cheapskate consumers” is an oxymoron; real cheapskates would rather save the cash entirely. Go for rarity and uniqueness; everyone has had enough of spa and massage or dinner buffet deals.

2. Content marketing is your friend. Groupon is often praised for “killer” copy that accompanies its deals. Deals alone are boring, but that is how most daily deal websites operate. Weave a story to go along with your deals. Frame deal details as a narrative instead of yet another set of bullet points. Give your customers ideas. Start a blog that makes your customers like you and that provides your customers with something else to do other than simply buy your deals.

3. Focus on some sort of niche market. We all love to sell everything to everyone, but the truth is we are probably more well-posited to serve one or a few specific markets based on certain geographical areas, age groups, genders, occupations/hobbies, etc. The benefit of serving a niche market is that your niche market will see you as speaking to them directly, because you are. It is also easier to brand your website and curate specific deals for a well-defined market that has unique characteristics rather than for a mass market that theoretically likes everything.

4. Get sustainable deal flow. Lack of high-quality deals is probably the number one reason that daily deal websites eventually die, because that is supposed to be their core competency. The daily deal website is simply a tool. It is not the focus. The deals are the focus. And high-quality deals are deals that consumers want.

5. Ramp up on customer service. Finding companies where you can just directly talk to their employees – in real-time or otherwise – is difficult these days. Communicating often with customers (and being ridiculously accessible) is one of the best ways to build trust and closeness with your customers. It is, after all, always easier to buy from a company you trust. “But how do I start?” Easy: just be available and proactively engage with your brand enthusiasts via email, live chat, Skype, Facebook Page, Twitter, blog comments, Facebook comments, etc. Use them voraciously. They are all free, so there is no excuse not to use them.

The good thing about a crowded space is that 1) the market is super-validated, and 2) it is relatively easy to stand out among the hoards of mediocre businesses. The overarching principle to remember is that there is no one principle that works for all markets; talk to your customers, find out who they are, what they like, and please them. You will be surprised how much strategic planning becomes easier and more directed once you receive constant input from your customers.

Direct marketing remains a popular channel for many businesses to reach potential customers. Traditionally, direct marketing on its own is used to increase awareness, arouse interest, and drive action. For those who are familiar with the AIDA framework, direct marketing is used to achieve all of the four stages of AIDA: Action, Interest, Desire, and Action. Despite claims that direct marketing is still as effective as before (e.g. here), what we are seeing is that, particularly for high-ticket purchases, direct marketing is increasingly losing its ability to drive action or arouse an interest to buy. These days, the value of direct marketing largely lies in its ability to build awareness.

The reality today is that the emergence of social media and search engines has allowed consumers easy and free access to a wealth of information about brands and products in the market. Consumers almost always want to make an informed purchase decision, and information from unbiased third parties now form an indispensable component in consumer research. In fact, information from other consumers who have had experiences with the product, brand, or company in question is considered more trustworthy and useful than information from the company itself. The only valuable information that can be obtained from the company itself is objective information, which the company is in a position to provide. Marketing is about facts and not opinions after all.

Direct marketing is nonetheless still useful in increasing awareness, because awareness is neutral. People either have or have not heard of your products, services, brand, or company. Consumers are unlikely to shut out new or unfamiliar offerings from their windows of consideration, since consumers love having a choice as well. However, generating awareness is only a small part of effective marketing. Awareness about a brand is ultimately knowledge of the existence of a certain offering. The merits of said offering have to be evaluated and verified with reference to the reviews, opinions, and experiences of others who have personally tried the offering.

A potentially effective strategy to reach new customers is to use direct marketing in concert with word-of-mouth marketing. Direct marketing captures attention; word-of-mouth marketing converts that attention into desire and action to buy. Ultimately, real sales are driven by what others say about you, not what you say about yourself.