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In the Media




DQ Ice-cream and Daily Deal Site Consolidation

Small Business, STAFF - Posted by: Jenny Lee - Sep. 26, 2011

A quick email chat with Gary Lipovetsky, president of DealFind, which has had a few notable successes lately. A $36 Afternoon Tea for two deal (pastries, sandwiches, scones) at The Fairmont Hotel Vancouver sold an extraodinary 10,961 vouchers. A recent Vancouver Dairy Queen deal, DealFind’s second biggest deal, sold 2937 vouchers for $2.50 medium Blizzards, a 52 per cent savings off the $5.25 retail price.

1. What’s going on in the daily deal, or Groupon-clone, world?

“Over the last couple of years, we’ve seen hundreds of these daily deal sites pop up throughout North America. The reality of the situation, however, is that there are only a few major competitors in the industry. Only a small percentage – less than 10 percent – have proper funding to really compete in this market.  These smaller sites without funding behind them do not have the infrastructure to grow. That’s why you find so many of them only available in one or two markets. They are unable to move beyond that because they cannot support many aspects of the business like customer service. Public perception is that there are more and more daily deal sites entering the market, which is true, but the number of major players is actually getting smaller as these smaller companies end up folding or trying to sell off to a funded company. Ultimately this benefits the consumer since they end up buying from these credible sites that insure their vouchers.”

2. Why did the Dairy Queen promotion work?

 “There are a number of factors that made this Dairy Queen deal such a pervasive success – the first being that everyone loves ice cream. Deals featuring products or services with mass appeal like ice cream or cardetailing are always going to be better received than niche deals like photography classes or skydiving. Dairy Queen is also a trusted brand. Consumers are naturally inclined to go with what they know and are comfortable with. When they make their purchase, they need to be assured they’re getting the value they expect and minimize the risk of being dissatisfied. Dealfind also has a very large subscriber-base in Vancouver, so our deal was exposed to a huge number of people. What’s interesting too is that it would be easy to assume that the price of the deal being so low factored in with the number of vouchers bought, but that’s not always true. Some of our most successful deals have had price points of $150 or $250. For the consumer, it’s all about value.”

 3. Advice for business owners

“Everyone wants to save money. Deal sites offer that, as opposed to an advertisement. When you decide to go the daily deal route, it’s imperative to make sure the site is reputable. Sometimes start-ups will offer you a 90/10 or 80/20 split, and that should be a giant red flag. With a revenue share like that, is not feasible for the site to have stability, let alone make a profit. If it looks too good to be true, it probably is. Do your due diligence as a business owner to research the site and the traffic it gets. Tools like Alexa.com show you where a certain site ranks in terms of traffic.Also check out how many cities the deal site is available in.”

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