AOL Enters the Increasingly Crowded Daily Deals Space

The daily deals space has been a very interesting one to watch, particularly from the small business standpoint. On the surface, daily deals services like Groupon and the slew of others that are coming out of the woodwork seem like a great way to get customers, yet we keep seeing complaint after complaint from businesses who have had bad experiences, not only with Groupon, but with this type of service in general.

Groupon CEO Andrew Mason has called Groupon the "savior of small businesses," and PCWorld recently ran an article on why "Groupon sucks for small businesses."

Last weekend, TechCrunch ran an article called, "Why I Want Google Offers And The Entire Daily Deals Business To Die". Here’s an interesting snippet from that:

For businesses, the notion that deep discounting is the way to acquire loyal customers is equally dangerous. Competing on price doesn’t get you love; delivering high quality products and services, engaging with your customers and creating unique experiences does. The best customers buy experiences, not price.

I find it ironic that Howard Schultz, the CEO of Starbucks is on Groupon’s board. I’m reading Onward, and in it he describes the great lengths that Starbucks went to during the depths of the recession to disguise discounting. He knows that in the long run, deep discounting is bad for the brand.

Interestingly enough, AOL (which owns TechCrunch) has now announced the launch of its own daily deals service with Patch Deals.

Patch says there aren’t any upfront costs to promoting a deal with Patch, that they have a standard revenue split once the deal has closed, and that merchants only pay a revenue share for sales which have already been made. The company says merchants will get paid within 30 days of the deal closing. They’ll also let you know when to expect your deal to run (approximately), and once the dates are set, they’ll notify you so you can prepare (something we’ve seen complaints about related to Groupon).

Patch says its team works with merchants to create offers, but needs input from the merchant to "get the right facts included". They will help you track who has redeemed the deal via their Merchant Portal. They promote deals via email newsletters ad through Facebook and Twitter

"Through this simple yet fresh way of redeeming local deals, Patch and Serve will offer users an even stronger connection to their communities and the businesses in their area," commented Warren Webster, president of Patch Media. "We are proud to partner with Amex given their reputation for innovation in the marketplace, and are eager to see how our collaboration may further benefit our collective consumers."

While Patch Deals is already live in a few select communities, it looks like it will be offered more broadly this fall.

There are 6 Comments. Add Yours.

Deals of the Day
July 23, 2011 at 8:27 pm

local daily deals are here to stay no matter what the big player does, the bigger the player the harder for them to maintain customer and merchant satisfaction and be flexible for the needs of the merchants.

most of the big players will force the merchant to settle for a 50-50 split on deal buys which eats away at any remaining profits for the merchant and they then justify this for promotional expense while the not so big players will allow merchants to have a bigger split, say 70-80% in favor of the merchants.

as for mechants who would opt-in for any promotional service of daily deal sites, it is advisable that they make plans and estimations on how much volume of deals they can service before proceeding so as to limit any financial effects on their bottom line and turn the deal buyers to frequent customers by giving good service/products.

any deals site are just promotional company, it is still the merchants/businesses where customers end up to and a good interaction with the customer may it be by service, products or what not is the most important promotion they can give to ask the customers to return to their place.

it has been proven and will always be that the secret ingredient to successful business is "Excellent Quality" service/products, all the rest are just to help you get started and deal sites are there to only help businesses gain a wider audience.
Guest
June 14, 2011 at 11:21 am

There will be daily deals in the future but they will be dominated by the local newspapers which will be revitalized by the technologies of dailypost.org
Steve
June 14, 2011 at 2:13 pm

Chris, You have written another great post on the new fad of coupons, and the dangers it poses to business (small, and big too, I think)! I think the TechCrunch quote nails it. I would put it another way, just to make the point though… don’t compete on price, instead compete on value. If you try to be the lowest price, there will always be someone willing to make a penny less, and your costumers will have no loyalty to you. But if you offer them the best value, they will stick with you… at least in my humble opinion.
Steve, Pinnacle TradeShow Exhibits, the leader in the best value tradeshow exhibits!
legal
September 3, 2011 at 9:52 am

But most importantly, in an effort to further define itself, AOL has made the bold decision to forgo real-time updates in favor of a magazine that you can actually finish reading throughout the course of the day.



*Do you have a business* site?** Submit your business related site FREE!

Accounting Book Keeping, Training... Advertising PPC, Print, Banner... Investing VCs, Mutual Funds...	Brick and Mortar Stores, Offices... Research/Studies Research, Data, Studies... Tips/Tutorials Tips, Advice, Tutorials...

» Submit your site «

AOL Enters the Increasingly Crowded Daily Deals Space

Patch Deals launched. Any Better for Businesses?

What do you think? Respond. Cancel reply