31% of Daily Deal Users Are New Customers


Groupon and other daily deals sites are bringing in new customers -- although they are also giving deals to existing customers who might otherwise have paid full price, according to a new study from online customer satisfaction measurement company ForeSee Results.

ForeSee probed daily deals site usage as part of its annual customer satisfaction survey (22,000+ online shoppers) on the top 100 e-retailers.

The good news: Among those who buy daily deals, 31%, are new customers (many of whom weren't aware of the company before the deal). In addition, 27% were infrequent customers, and 4% were former customers.

"That's at least 35% -- and arguably 62% -- of deal buyers who represent new business," observes ForeSee president/CEO Larry Freed. Obviously, e-tailers will have to satisfy these consumers to a high level in order to convert them to longer-term customers, he adds.



The flip side, of course, is that 38% were already frequent customers of the retailers. With this group, e-tailers are eroding their margins and potentially conditioning loyal customers to become discount-seekers, Freed points out.

Other findings:

  • About two-thirds of top-100 retail site visitors are enrolled in at least one daily deal email program (65% of the 22,000 respondents).
  • Groupon continues to be by far the most popular daily deal site. Over half (51%) of visitors to leading online shopping sites subscribe to Groupon, versus 24% who subscribe to its nearest competitor, Living Social. Subscriber percentages for other sites: Google Offers, 14%; Woot!, 10%; and other, 7%.
  • However, nearly half (46%) of subscribers subscribe to more than one service. This means that Groupon will not necessarily lose traction just because competitors gain traction, Freed notes.
  • Nearly two-thirds of subscribers have purchased at least one deal in the past 90 days, regardless of which site(s) they subscribe to. One-third had used one offer in the past three months, 55% had used more than one, and 11% had not used any offers as yet. Also, 89% of those who had used one or more deals reported having redeemed them during that 90-day period.

  • Demographics-wise, the sites skew to the 25 to 44 age group (on average, this group represents 43% of subscribers across Groupon, Living Social and Google Offers), followed by those 45 to 64 (39%). In annual income terms, 38% of subscribers across the sites earn $50,000 to $100,000, and 28% earn $20,000 to $50,000.

Daily deal companies -- and their investors -- "should be thrilled" with the strength of these research results, notes Freed.

Next story loading loading..