With Groupon mishandling its IPO, Facebook closing down it's Deals offering and Yelp cutting back on its deals staff, pundits are starting to question the viability of the deals market. Lots and lots and lots and lots of questioning. These folks are as wrong as those that said Facebook Deals would be the death of Groupon.
Recently Jim Anderson of Silicon Valley Bank wrote a nice analysis of the online deal market.
The money quote:
This brings us to the critical success factor for all these daily deal companies. Getting repeat customers from the 5 million strong e-mail list is easy. Making your real customers, the merchants, successful with the product is the challenge….
We think a winning formula is sitting in front of anyone who has strong relationships with these local merchants — especially a firm that has a history of helping them with Web marketing and promotions. Whoever teaches the merchants to use these new techniques will own this market.
Jim and I think alike (except getting a 5 million strong email list may be a bit more challenging than he makes it out to be). I am not a pundit, I am an operator. An operator that is seeing double digit traffic and revenue growth. The deals market is a large opportunity that is not going away anytime soon. The key to success is helping merchants use online promotions to get and keep new customers while offering great deals of value to consumers.
It's as simple as that.