Table of Contents -- Daily Deals: The Merchant Perspective

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As requested, here is the table of contents for the research report, Daily Deals: The Merchant Perspective

Daily Deals: The Merchant Perspective

The last two weeks have been ripe with news about Facebook and Yelp pulling out of the competitive Daily Deals space (turns out Yelp didn't). On the other hand, Groupon and LivingSocial have filed for initial public offerings in recent months to the tune of multi-billion dollar valuations. Even Angie's List—a paid Yelp-like service—has made serious traction by offering daily deals from local merchants and also filed for an IPO recently.

So what do merchants love and hate about daily deals? Here are some juicy tidbits straight from the mouths of over 2,500 merchants.

"Let's Do It Again!"

The following chart shows a fairly wide range of merchants’ willing to run another daily deal (with the same provider). Angie’s List leads the way at 86%, but it’s important to note that virtually all of its deals are for Home Services (e.g., plumbing, electricians, home cleaning).

Heavyweights Groupon and LivingSocial fare well compared to the field, with 3 out of 4 merchants willing to run another deal. And it’s a good thing Yelp didn’t get out of daily deals!

B2brev_-_pct_would_use_again

 

Highs and Lows of Running a Daily Deal

We analyzed over 160,000 words of reviews that merchants wrote about the top daily deal providers. Here are a few highlights of what they said:

  • Daily deals provide great advertising beyond the immediate direct sales: Over 500 merchants mentioned this, perhaps none so enthusiastically as this merchant:

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  • Daily deal offers attracts undesirable customers: Nearly 100 merchants complained about daily deal users being “entitled”, “horrible”, “rude”, “sneaky”, “cheap” and other descriptors perhaps too controversial to print here.

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The Best and Worst Business Categories

We found that merchants tend to be more or less satisfied with Daily Deals, depending on their type of business. While Restaurants and Food & Drinks merchants were least satisfied with their experience, Entertainment and Health businesses were most eager to run another deal with their provider. Here are results from 4 of the most popular categories:

B2brev_-_by_key_category


Improving the Daily Deal Experience for Merchants

So, are daily deals going to pot as suggested by numerous media reports and anecdotal evidence from unhappy merchants? Clearly, there are improvements that daily deal providers can make to optimize the happiness of merchants, which is critical for their long-term success.

Here’s how Groupon has been performing since their inception in 2009, with an overarching rise in satisfaction ratings over time:

B2brev_-_groupon_over_time

 

Get the Full Scoop

Purchase the full B2Brev.com research report "Daily Deals: The Merchant Perspective" to get over 50 pages of key insights on the Daily Deal experience from the merchant’s point of view (see a preview of the contents). It covers over 2,100 businesses that used Groupon, LivingSocial and Angie's List.

Products and Services We Pay for at B2Brev

We were inspired by this post on Hacker News.

These are the products and services we paid for while building an online marketplace for food.

Braintree (payments)
GoDaddy (registrar/SSL)
RingCentral (800 phone number)
Amazon EC2 / Linode / Rackspace (cloud storage and servers)
ConstantContact (email newsletters)
Dropbox (collaboration)
FedEx / UPS (shipping)
Bank of America (payroll/banking/credit card)

These are the FREE services we can't live without:

Google Analytics
Google Voice
Google Apps
Mixpanel
Cloudkick
Olark

These are services we've used once in a while:
VLP (startup lawyers)
Overnight prints (biz cards)
iStockphoto (stock photos)

...and there many others too numerous to name.

We've been fortunate to leverage the Ycombinator community for answers on the mundane (what's a good way to send email newsletters?) to the mission critical (what's the best payments provider for an online marketplace?)

We're launching B2Brev.com to help folks make informed decisions on B2B products and services based on honest reviews from other business owners and managers.