They just got 70% off those drinks thanks to a daily deal siteGroupon, Living Social, WeeklyPlus, Deal Chicken … Icould go on …

Right now, there are (at least) 5 different dailydeals sitting in my inbox. If you’re a business owner, chances are you’vestarted to wonder if advertising a deeply-discounted product or service on oneor more of these sites is a smart business move for you. While there aredefinitely advantages and disadvantages, it will depend greatly on the type ofproduct or service you have to offer. Restaurants and special events seem to doquite well on daily deal sites, but risk takers, like the dealership thatoffered the very first daily deal for a vehicle, lost big with only four takerstotal. 

Let’s discuss some pro/cons to advertising yourbusiness on sites like Groupon and Living Social.

Advantages

  • With the huge database of followers the big dailydeal sites like Groupon and Living Social have, your business will gain a lotof exposure
  • If people like what you have to offer, they may return,helping you make up the profit you lost by offering the discount and hopefullyincreasing your revenue over time
  • Most daily deal sites do not take profit from youupfront, which means you do not have to pay out of pocket

In short, repeat customers, business exposure, andno upfront costs are the advantages to promoting your business on a daily dealsite.
Disadvantages 

  • You may see a temporary increase of customers due tothe daily deal, but if those customers do not return, you may not make yourprofit back
  • If you have a regular customer base already, offeringa daily deal may alienate them. For example, if you own a yoga studio and havea class full of regulars who attend every day, they may not enjoy overcrowdedclassrooms of sweaty daily deal buyers and take their business elsewhere.

In short, daily deals can be a risk for companies,especially small businesses. If you’re banking on getting a slew of new,regular customers, keep in mind that daily deals run, well, daily. This meansthat there’s always going to be another company like yours offering anothergreat deal for them to buy. So why would they pay regular price at yourbusiness when they could just wait for another daily deal to pop up and gothere?