Daily Deal Builder

Craig - thousands of businesses have done this successfully. It's pretty solid risk-free advertising to get new customers.

I've been learning all about this and these sites can work a few different ways and a few different parties are involved.

Local merchant or product owner.
Daily Deal site owner.
Customer & subscribers.

The way that the businesses are typically able to see results is because the technology uses collective buying power. This is when a group of people come together and use the rule "there's power in numbers," to leverage the group size in exchange for discounts.

Up until recently, this really only happened with B2B transactions.

The shift has occurred because:

1 - Daily Deal sites and the collective buying technology which allow steep discounts to the consumer AND sends a lot of new clients to the merchants.

2 - Social media gives us the ability to instantly share things with our entire network of friends using Facebook, Twitter, Myspace, LinkedIn, YouTube, etc.

There have been businesses that actually went in the hole by offering one of their services on Groupon - but this was only result of poor planning by the business owner to not properly price the discount correctly and not set a maximum number of units sold cap on the deal.

The daily deal and group buying sites can set a minimum number of units that must be sold in order for the deal to be "on."

After someone purchases and the threshold has not been met - they are encouraged to help promote the product via social networking sites to their friends and family so that they actually will get the deal. This sparks the user generated traffic that makes these viral because people want that deal and thus will share the deal via facebook/twitter/email/etc with all their friends to ensure the deal is 'on.'

If you are a local merchant or product owner - you need to figure out the minimum number of new customers that you need in order to offer the deal. Figure out what the value of a new customer is to you. Work out some numbers before committing to this. It's also important to set a maximum number that are for sale before the deal is sold out.

As the owner of one of these sites - we can charge businesses an up-front fee to promote one of their discounts on our site - OR we can do it for free with a split percentage worked out in advance (or a mixture of both ways).

There are quite a few of these sites popping up, but I've learned that the loyalty Groupon, Livingsocial, and the others customers and subscribers have is not really brand loyalty to them; it's simply loyalty to the great deals they bring to the consumer.

I am interested in Daily Deal builder as well - but their monthly rates concern me a bit - as they increase as your membership increases.

Memberships - aren't necessarily paying customers, many people sign up to all kinds of deal sites - but never buy. What about people that abandon those emails - but don't un-subscribe - I would be paying for them for years.

I wish there was a cap on it.