Do Social Deal Sites Really Work?

9 September 2016

If yes, how should they design the deal? If no, why? Social couponing sites provide daily discounts and coupons for members. Discounts run across various categories and industries: from food fairs to Whole Foods, beauty salons to theme parks. Users can opt to purchase the coupons, which generally provide discounts such as “2 days for the price of 1 at Brooklyn Museum” or “VIP access to Taste of DC. Users then print the coupon and use it as specified. It is called “social couponing” because customers are encouraged to share their deal with friends on Social platforms like Facebook, Twitter or others. If a certain amount of friends buy the same deal, a special condition might be triggered (f. e. the friends get the same deal even cheaper). In our case the question is whether the Australian theme park “Flanagan“ should cooperate with the social couponing provider Daily-Dilly or not.

There are several aspects, why it makes sense for “Flanagan Theme Park” to do it: In the short-run more customers would visit the park, because the couponing allows con-sumers interested in trying a new experience to do so at a lower cost/risk. Furthermore it en-tices consumers to try things they wouldn’t otherwise consider, just because of the cheap costs. This would positively affect the revenues of the park. This surplus of liquidity could be used in order to conduct necessary investments in the park (f. e. the water circulation system).

Do Social Deal Sites Really Work? Essay Example

These investments would help to enhance the quality of the park and represent a long-term benefit. A better park quality will have a positive influence on the customers’ satisfaction and his disposition to come back. In addition, a socio-psychological effect would take place: The higher attendance and the associated rise in queuing-time would make the people feel “they’re waiting for something special“. This derives from the fact that the actual benefit a visit in a theme park has fort he customers highly depends on how the other people liked it.

Secondly, the utilization of this tool would make Marketing more scalable for the park. The amount of money spent on a attracting a customer could be calculated exactly (Value of the coupon + Costs for the usage of Daily-Dilly) and exact indicators like for example the Return of Investment could be calculated. This would have a huge improvement on terms of planning security (future cash flows could be predicted more precisely) and Controlling. Thirdly, the park could avoid “throwing money at people who aren’t really potential custom-ers“.

With the current comarketing strategy, the target of the marketing actions can’t really be controlled. With the utilization of social-couponing platforms and underlying Big-Data analy-sis, offers could be addressed directly to potential customers. This would improve the effi-ciency of their marketing efforts. On the other hand there are also aspects disagreeing with the utilization of social-couponing: Social couponing is driving one-time shoppers or discount-seekers to venues that they will not return to, just because of the thrill of having made a snap.

Social-couponing engenders a one- time experience, but not necessarily a long-term customer relationship. In addition these cus-tomers are widely considered to be more inconsiderate in terms of feeling responsible for the facilities they are using with the deal. Furthermore could the sudden rush of visitors, triggered by the coupons, overcharge the infra-structure of the park. In the worst-case scenario this would lead to an almost collapse of the parks and consequently to a massive decline in the customers satisfaction. An example for this effect is a Cafe in Tokio.

Cooperating with Groupon, they offered a huge discount on home-delivered New Year dishes. The rush was overwhelming and so the Cafe couldn’t maintain their level of service quality. Customers complained about very long delivery times and a disappointing quality of the dish. A boomerang for the company’s reputation. After the consideration of all Pro and Cons, one can say that the positive aspects overwhelm. Especially the fact that for venues like a theme park, which consumers tend to only visit once or twice a year, social couponing incents relevant patrons to visit the venue at a discounted rate.

Design of the deal The ideal deal has the minimum amount of restrictions on where, when, and how it is con-sumed, and by whom. Greater flexibility will increase the chance that people accept the offer, but limitations are often necessary to protect vendors, for example, against running out of inventory or capacity. That’s why why have to think of the perfect deal structure for “Flana-gan Theme Park”. Deal characteristics •Sold out •For new customers only •With a hurdle—minimum requirement: oNon-transferable? oWith purchase quantity restrictions oWith redemption specifications: Instore only? •Online only ? 1 •Redeem from home •Other •With stipulation regarding gift purchases: oMay buy multiple deals as gifts ? 2 oAdditional gift purchases restricted •With restriction per person/family/ household oMay buy between 6 and 10 per unit oMay buy up to five per unit •Integration of location-based social networking (f. e. foursquare) ? 3 ?1 In order to prevent the situation that two comparable customers pay two different prices for the same tickets at the ticket counter, couponed tickets should only be redeemable online. 2Since the main goal is to attract more customers, gift purchases should be fostered ? 3 The park should facilitate the sharing of the location’s information. In order to achieve a high sharing rate, the park certainly needs a sophisticated presence on in social networks. Furthermore could the installation of smartphone-legible QR-Codes throughout the park make the visitors to share their location with their friends. This would be cost-free advertisement. 2In your opinion, which types of companies are most likely to benefit from promoting on social deals sites?

From the economical perspective, businesses with a high turnover and a huge customer fluc-tuation should utilize social-couponing. This is the case for business who could be categorized as Food and drink, Sports and recreation, Auto services and Art and entertainment. These are the industries who are the most likely to gain a profit from social deal sites. Furthermore the social aspect of a lot of deals, the so called group buying, might be useful for companies who offer services for groups, who so to speak offer a group experience.

This es-pecially is the case for restaurants (Food and drink), Spas (Recreation) and for travels (Holi-day and sightseeing). Another point to be mentioned from the social perspective is that the role of Social Networks is important too. People will be more than willing to show their friends what a great bargain they’ve just made on their latest buy. Especially highly prestig-ious (respectively ways of showing the personality of the person) consumer goods like Cloth-ing and accessories should be influenced by this.

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Do Social Deal Sites Really Work?. (2016, Sep 23). Retrieved May 13, 2021, from https://newyorkessays.com/essay-do-social-deal-sites-really-work/
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