• by Neil Rosen , April 12, 2011

As we have previously discussed, one of the newer online marketing strategies that threatens the ability of companies to maintain close relationships with their customers is the daily deal site. The threat to retailers, ecommerce companies and other businesses comes in a number of ways.

First, daily deal sites offer products and services at deeply discounted prices. This puts the retailer in an uncomfortable position. If the retailer offers its products to consumers through daily deal providers, that could challenge its ability to maintain a stable pricing strategy and significantly deteriorate overall margins. On the other hand, if it doesn't offer products and services on daily deal sites, the retailer runs the risk of losing customers to the competition.

And while it is likely that daily deal sites will run their course in the not-too-distant future and morph into something less persistent and interruptive to consumers, the threat that exists today to online retailers and ecommerce companies is real. It's the threat of this being just one more piece of the already complex equation, an equation that includes auction sites, product review sites, and social networks, all of which are day after day taking the R out of CRM.

There are many smart strategies marketers can devise to optimize their approach to daily deals, such as offering a very limited selection of their products through these vendors, products that either are loss leaders to help people get to know the company, or close-out products to get rid of at any price. These strategies achieve the desired results of acquiring new customers and/or helping cash flow. And while these strategies can make good use of daily deals programs, they do nothing to mitigate the risk daily deals companies create to the core relationship retail and ecommerce companies have with their customers, the relationship of being the go-to provider to loyal customers.

In the face of this threat, a number of companies have come to us asking for our thoughts on whether or not they should start offering daily deals of their own to their customers, instead of going through other daily deal providers.

On the plus side, offering daily deals is a great way for companies to increase the frequency of customer email communications, with a low threat of damaging their reputation or inbox delivery. And with increased frequency of these communications comes a lift in sales and ROI. Since best practices dictates that companies give customers the ability to opt-in to daily deals delivery, it's unlikely that there would be an increase in complaints.

But deploying their own daily deals is not an optimal solution for most companies. Few companies have enough diversity in products and services to have a good reason to offer deals on a daily basis without over-marketing. And as deals become redundant, or create little value, unsubscribes increase ... and the company's subscriber base begins to dwindle.

In addition, most daily deal sites operate by leveraging local deals, deals at local restaurants, spas, or for local concerts, sporting events, and even coupons for purchases on Main Street, with a few national brand offers sprinkled in to add the recognition and trust to their program that partnering with a national brand offers.

So the right answer for most companies is to embrace the value that daily deals sites offer, build a clear strategy to use them for both acquisition and for product turn, and to focus their efforts on service and support.

Customer loyalty may start with great products, but at the end of the day it is great support that keeps customers coming back. Whether a customer buys a product from you on your website or on a daily deal site is irrelevant to the high level of support you provide. Always tell customers you are going to give them outstanding service, provide outstanding service, and remind them of the outstanding service you just gave them.

The R in CRM has always been, and always will be, driven by superior customer service. Accomplish this and next time a consumer is ready to buy a product you offer, she's likely to come directly to your website rather than try to wait in the hopes it will pop up on a daily deals site in the not-too-distant future.