It’s been a busy couple of months for Matt and myself. We’ve been hard at work at Kanj.us, the right way to do social commerce.
The Problems with Normal “Daily Deal” providers
- One deal a day – They’re “daily deals”. Some companies only offer the deal for one day, others only feature one a day and so on. The point is that there is limit to the number of deals that a service can have on a particular day
- Pay first, get later – You often have to buy the deal online before you can go get it. Although this isn’t true for every service out there, it’s true for quite a few. Why should you have to type in your credit card number (or even log in) to get a deal?
- Buyer’s remorse – You might forget to use the deal after buying it. Lets face it: we often buy stuff without really thinking it through. And then we forget to use the deal, and it expires. I’ve been there myself
- Not really social – They call it social commerce, but there’s nothing “social” about most daily-deal providers. You don’t interact with your friends necessarily; you’re buying with a bunch or strangers that you know nothing about
- Delayed payments – When a customer buys a deal off a website, that company has your money. They will (and do) take their time paying you.
- High costs – Although the rates that other companies charge vary, it’s probably fair to say that you will probably see no money from what people are buying from you
- Lack of a safety net – Unless you cap the number of deals you want to sell, it’s possible to get completely overwhelmed and find yourself staring at a large hole in your accounts because your promotion was a little too successful
- Doubtful repeat prospects – Running a daily deal does not guarantee you repeat visits from your new customers (one popular provider reports that 22% of deal buyers return). You have no way of distinguishing the deal hunters who never come back from your loyal customers
- Poor redemption methods – This last one is based on personal experience. Lots of providers have merchants write down coupon codes and type them in. This leads to errors. For example, I received a refund on a cafe coupon which the provider thought went unused. I know I definitely used it, so the server at the cafe screwed up writing down the code. That’s money that the cafe will never see again (I offered to pay the owner back once I found out, but he told me to not worry about it)
This is just the tip of the iceberg. The point is, daily deals and social commerce, as they’re done now, could use a lot of improvement.
In my next post, I’ll talk about Kanj.us and why it’s better.
Update: The original post didn’t have point 5 (Poor redemption methods)