Massages, Mexican, and Memberships: America’s Favorite Deals

LivingSocial, a daily deal site, released their Member Must-Have’s Study for Q2’11. The study was broken up into four categories: beauty, fitness, food, and entertainment, and each of those had sub-categories. Can you guess what category racked up the most purchases?

That’s right: Food! (See table below for complete food category breakdown.) It would be interesting to see the number of deals offered each week by category to know exactly what LivingSocial users are seeing. While food was king at the category level, the top-selling sub-category was massages, with 154,085.

What can we learn from this, and how can it be applied at the region, city, and neighborhood level?

LivingSocial Food Category Breakdown
Category U.S. Vouchers Sold
Mexican Restaurants  107,159
 Pizzerias  88,624
 Frozen Yogurt  67,195
 Sushi Restaurants  50,491
 Ice Cream  46,446
 Cupcakes  36,495

As LivingSocial Senior Vice President of Sales, Mandy Cole, said, “The results from this quarter’s U.S. trend study paint a really strong picture of the things people like to do in their free time.”

In short, Living Social has conducted some valuable market research that you can take advantage of.  My challenge to you?  Make a list of local businesses in the most popular sub-categories to add to your FanTools prospect list today!

For the entire article and daily deal numbers breakdown, visit the article posted in PR Newswire, FORE!- LivingSocial Identifies Americans’ Deal Obsessions.


Who is Worthy of a Deal?

I got this question recently: Why would I give coupons to my Facebook fans? They will pay full price. This question can be framed in several ways. For example, you could argue that it’s akin to this question: Is it true that the closer a consumer gets to actually parting with money, the dumber it is to offer them a deal?

 

But let’s stick with the original. A couple of responses come to mind:

  • You don’t know that a Facebook fan is willing to pay full price, especially if you’ve ever asked Facebook users to Like your page in order to get access to deals
  • Your understanding of the power of  promotions is too narrow — you might be willing to trade “paying full price” for trying a new product, bringing a friend, writing a positive review…
  • You might give a coupon to someone willing to pay full price to increase their loyalty and advocacy

Let’s take this scenario.  You are a local restaurant owner using Four51′s FanTools platform.  Every table in the joint features a table-tent that asks customers to login to Facebook from their mobile phone and get the SmartDeal (offer) available on your Facebook.  The offer is $2.00 off any appetizer.  Many people ask why you would just “give” them this deal when they are already planning to spend money in your restaurant.  The possible reasons?  Trial, cross-sell high-margin items, and up-sell to boost average ticket size.

Here are some other reasons to offer a deal to in-store customers:

  1. Promote a special event or a loyalty program
  2. Advertise a new store opening
  3. Promote restaurant services (catering, delivery, take-out, ect.)
  4. Encourage visits during other day-parts — i.e. come back later today for X or come in this weekend for Y

Finally, let’s say you did forgo $2 in sales because you gave a discount to someone who was poised to pay full price. Is that such a terrible thing? Don’t offer discounts and then hope no one hears about it. Instead, be smart and have a plan. Be excited about the opportunities to use promotions to drive your business and your brand, and shrug off the handful of customers who (you think) would have paid full price.