Groupon has 38 million subscribers and in just the last 80 days, LivingSocial more than doubled its user base to 23 million. With daily deal sites expected to reach $1.73 billion in revenue next year, we thought we’d share the results of our recent (non-scientific) poll.
Just like our social gaming poll results, word-of-mouth (WOM) plays a huge part in driving up membership. And incentives (a.k.a. “game mechanics”) for sharing deals which is core to LivingSocial’s business model adds to WOM spread.
Mobile vs. Email
91% of our poll respondents get their deals from email vs. 18% from a mobile app. With the expansion of LivingSocial Instant Deals and pending launch of Groupon NOW, we expect this number to change over time as more and more people take advantage of the serendipitous nature of merging LBS with instant deals.
The Holy Grail Up-sell & Repeat Visits
Outside of the social sharing that happens (which is extremely important), deal purchases from existing loyal customers is (or should be) less value to a business doing the deal. The ultimate goal is to reach prospects to consider, try, and keep coming back to your business. The group buying model shows promise:
- 96% of our respondents redeem their coupon
- 78% spend more than the coupon amount
- 93% are likely to revisit the business
So not only does the deal help get people in store, while they’re there, they tend to spend more money which helps make up for the short-term margin loss from doing the deal and, most importantly, it fosters repeat visits (hopefully from NEW customers).
And the most popular deal type? Restaurants.
Do your own experiences with group buying sites like Groupon, LivingSocial, and BuyWithMe align to these results? Leave a comment.
This was originally posted on Hill Holliday's blog.
