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How/What Should I Price This At?

by mcconnon12
3 replies
Hey Warriors,

Need some insight on this and what I should be pricing this promotional service at.

So I own a local deal site which is not like a Daily Deal site at all. Essentially, we do free giveaways and have businesses offer consolation prices to entice or give an incentive for others who entered the contest to try their establishment. So a business gives away a free meal and then a discount to everyone who entered the contest.

Now what's unique is we are hyper-local so we only target a specific part of town so our list is much more receptive. Our CTR is 15-20% when we send out a blasts to sign up for the contest.

We have a decent FB following 2K and Twitter 700 and to be honest we have not even been hitting it hard yet. In addition to this we have a decent email list creeping up on 2k.

What I am wondering is if I get a 300 people entering a contest and I increase someone's FB likes on their page (the contest software makes it easy for people to like their page and follow them) by 50-100 and I do all the graphics, videos, coupon code delivery, etc.. they also get a ton of social exposure because we give them extra entries for sharing the contest.

What should I price this at?

Now not everyone is going to redeem the coupon and ultimately that will depend on how good the deal is from the business (mainly restaurants right now, but we can do anything really) but it will be decent because it is in the neighborhood because the of the hyper-local focus we have.

I am stuck on pricing I was thinking $1 for every entry into the contest and right now I am routinely bringing in 250-300 folks to each contest.

Thanks in advance for the help!!
#how or what #price
  • Profile picture of the author isaacsmithjones
    First of all, I wanna tell you that I love the idea!

    So you run a contest... and the restaurant gives away a free meal... and then the losers get an email or something saying,

    "sorry, you didn't win this time, but here's a discount"

    Is that the gist of it?

    I take it each entry is free?

    Now, I haven't come across this model before, so I can see why youd have a hard time pricing it. Do you have an estimated of how much ROI a contest will tend to bring, or is it too hafd to tell?

    Because to be honest, I'd charge depending on that.

    As you said, charging at 1 dollar, 300 entrants will bring you $300.

    But then if you knew that around 20% we're likely to take up the deal,and you charged $5 for each person who took up the deal, that would also be $300.

    So then, if you we're to charge more per deal taken up, or you knew you'd get a really good conversion, then that would be the better model.

    E.g. $6 at 22% is 66x6... $396 I believe

    On top of that, it would be easier to sell the idea to other businesses, as you only make money if they do.

    Hope that helps,. But this is new territory for me.
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    • Profile picture of the author mcconnon12
      Thank you Mr. Jones for your reply. I would love to have them track the deals and then get a % but most of the businesses I have dealt with just do not have good business sense or process to do so.

      I think down the road I would like to get an app made and the coupon can only be redeemed once they 'check-in' or something like that. This way myself and the biz owner would know.

      As far as ROI I could probably get a decent idea for most places by asking them their avg purchase.

      Thanks for the feedback.
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  • Profile picture of the author isaacsmithjones
    Happy to help.

    Lol... I know what you mean about business sense. And also, they could juat lie, so they pay you less.

    So a tracking app sounds like a good idea. And it would also give you easier access to the participants, as it could be multi-functional.

    I'd love to hear how it goes
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