local media insider
Case study

Three top group deal sellers show how they increased deal revenues

Creating high performing daily deals requires a combination of internal skills

Alisa Cromer
A picture's worth thousands of dollars. This chart shows e-mail is still the critical driver of daily deal sales.
"Mommy's Deals" on the new mom's channel will have less aggressive discounts of 25% to 35%
Software from Second Street uses pop-ups to collect every e-mail address.
Ahead of the pack of television sites: KY3.com links to a daily deal site that includes... golf. An "all golf" week of deals yielded $26,000 in March, 2011.
In tiny Statesboro, the daily deal takes every opportunity, including promotions in the top news rotator.

Second Street Media the largest provider of contest platforms and now of group deal platfomrs, selected two newspapers and one television station to share their best practices for gaining more revenues from daily deals. Here is a summary from the webinar presented to Second Street's partnering media companies:

1. Today's Deal at STLtoday.com

Company: St. Louis Post Dispatch

Circulation: 208,000 average weekday

Deal program: Five per week and one side deal

Key executive: Kelly Klein, Director of Sales

The first case study is from a major market that launched Today's Deal in June,2010. Kelly Klein, Director of sales says the effort began with all reps selling the deals, but picked up steam as the sales effort was adjusted to include a dedicated rep.

•Compensation As time went on and “deals slowed down," a separate commission plan no longer worked, but instead placed the program at the “bottom of the list of priorities.” Today the revenues from group deals count towards the revenue goals, so the incentive plan is sufficiently motivating.

Adding a dedicated rep A new hire now receives a flat percentage on all revenue brought in from the program, so is incented to set up the best deals, such as ones for favorite St. Louis restaurants, and the other top categories. The job description included trolling competitors for leads, and weekly brainstorms with managers and staff to select leads to pursue.

•Training traditional sales representatives In addition to training on "good" prospects, all reps are trained to sell against Groupon and Living Social and to answer the key question, "Why choose a newspaper deal program?" Reps have learned to focus on the promotional value added by the newspaper, including front page promotions; color ads in the paper; key positions on the home page of the site; e-blast and Facebook; and a value that totals $40,000 in promotions per deal.

The most common objection from merchants is that they can’t discount deal that much and “and then split it with us.” To counter this objection, sales representatives talk to merchants about the value of a new customer over one year.

•Sharing deal information A key best practice is to “Let everybody know which deals have worked, repeat them, and to continue learning “ from every deal.”

•The deal approval committee A committee meets twice a week to approve deals, and at least two members must approve the deal for it run. The committee includes Klein, the new product developer, online product specialist, and sometimes marketing and sales managers, who have an open invitation to attend. The goal is to generate more revenue than prior month and to drive email sign-ups.

•Creating a specific dollar-based minimum target for each deal All deals are evaluated against their potential to meet the dollar minimum target.

•Handling rejected merchants who are also advertisers Some reps take it hard if they have to go back ot the customer and tell them no. The sales reps have asked how “I’m supposed to tell the advertiser that a one quarter page and all this promotion won’t sell their product?” The reps are coached to explain how group deals are impulse purchases and don’t always work, for example, for products that require more education. A print campaign may be more appropriate in some cases in which a merchant “would not be a fit for a main deal and meet our revenue target.”

• Re-running top deals “All the deals we have re-run have always sold more” than the first time. This is a simple best practice that helps in-fill weeks when the quality of incoming deals seem insufficient.

• On the road map Like most successful SecondStreet partners, Klein's future plans includes seasonal stores, on which deals remain online for two weeks and may have a higher price point or limited quantity. Ideas include stores for holidays such as Valentine’s Day, Father’s day, Golf and Summer. Plans also include building a pipeline of travel deals which can start every Saturday.

Summary: Keys to success at the Post Dispatch include: Dedicated rep, deals committee, promotions in traditional products, Side deals/stores, and Re-running top performers

2. KY3.com's 1/2priceozarks.com

Company: KY3, inc Television in 74th DMA, Springfield, Missouri

Key Executive: Kent Oglesby, New Media Development Manager

Our second case study is a television deals program, created by a kocal TV station in 74-ranked DMA of Springfield, Missouri and also launched in June, 2010. In addition to the daily deal, there is a weekly deal and golf deal promoted on a separate URL, 1/2offozark.com (see third image to the right, click to enlarge). Oglesby's sales force is unique in that the digital-only team exclusively sells the digital products including deals; on-air reps can't sell deals but get a referral bonus. Here are Klein's keys to deal performance:

Focus on the highest value deals The online team does not treat deals as less rigorous than other sales. More people are familiar with deal programs, but it still takes two to three and sometimes more call to get a really good deal signed up. The team quickly identified that golf was a key high value category and ran an entire week of only golf deals in March, 2011, which generated $26,0000 in growth revenues as a result.

•The anatomy of the perfect deal Acquiring deals that perform at the optimum level is part deal selection, and part negotiating with merchants to allow multiple sales and remove restrictions. To help digital reps focus, they are trained on the "Anatomy of the perfect deal" including: 

a.Quality Brand

b.Broad target

c.Deal quality, price should be at least a dollar more than 50% off

d.Allow multiple quantities of sales

e.Have an expiration date a minimum six months out

f.Take advantage of seasonal opportunities  such as Mothers and Father’s Day

• Adding out of area and side deals. Another key strategy is going slightly out of area to sell side deals. Today the site also features Branson and “Weekend deals” focusing on day travel to outerlying areas.

•“Recommend a business” widget on the site Some great leads are generated from viewers, who go online to recommend deals. These leads are then followed up by the online team.

• Overcoming the number one objection As with the Dispatch, the top objection from merchants is having to sell something for 25% of its price and then split it.. To counter this objection, the team uses an ROI spread sheet “you can plug in and use as a calculator (see one attached here)." The calculator adds in any potential up-sells, repeat business, and the 15 to 20% of certificates that are purchased but which will never be redeemed.

“The upside is much, much greater than the deal itself. The deal itself rarely gets people too excited, “ Oglesby says.

• Training merchants The key tips for merchants to improve their deal strategy is to educate them to "throw out the notion that people who are coming in are only discount-seekers, and to roll-out the red carpet for them, and get them enrolled in other social media programs such as Facebook, e-mail."

 Summary: Key lesson learned include training the  online sales team to find the perfect deal, testing merchants with side deals, train merchants on deal strategy,  and have fun... the team bets daily on how many deals will be sold.

3. Statesboro Daily Deal

Company: Statesboro (Georgia) Herald, statesboroherald.com

Circulation: 7000 average weekday

Key executive: Courtney Caldwell: Multimedia Sales Manager

The third daily deal sales leaders was launched in November 1010, in the tiny market of Statesboro, Georgia by the online sales manager of a 7000 circulation daily newspaper. To acquire enough horsepower, Caldwell says the small market needed a lot of pre-planning and data collection, but that getting in to see the merchants and closing in one call has not been a problem.

•Launch plan Four weeks out the company began running both print and online ads not only to announce that the daily deal was "coming soon" but also to continue to build the opt-in email list (the existing email list was created largely through contests). The promotional campaign showed a variety of merchant logos from businesses who had signed up pre-launch, with a focus high profile businesses, in categories where people could justify spending: Restaurants, entertainment and beauty. Emails were added to existing email database composed from a variety of contests.

Separate sales team Caldwell, as the online manager and another rep sign-up all the deals. Traditional reps do not sell it. The online manager is also the "keeper of the deal calendar" controling the deal quality.

• Four question deal quality test Each deal that goes on the calendar has to pass a four questions deal test:

Is it an items that most people would use once a month?

Is it a gift certificatr with little or no restrictions, rather than a coupon?

Is it at least 50% off?

Would you personally recommend it to your own good friends?

Retail stores are limited to one deal per week. And the team negotiates to lower restrictions. For example, most restaurants will not be allowed to have restrictions, although the best restaurant in town may be ble to restrict to lunch or dinner only. Caldwell says that two in ten deals are turned down, due to price, restrictions or type, but that this rate is improving.

Sales pitch focuses on free promotions and other strengths Caldwell's "elevator pitch" focuses on guaranteed foot traffic: “How many programs do you run where you ONLY pay when customers actually walk through the door?" And also ties into the small town advantages, by telling merchants to “put their best foot forward.”

"In a small town if you take care of somebody they are going to come back and they are going to talk about you." The pitch for side deals is different, since it focuses on nitches such as doggy day care, bounce houses, and other services which are not day-to-day needs.

•On the road map: The Herald just launched a mom’s site, called Moments (see last image to the right) and plans to launch “mommy deals on that site, anticipating that these will be discounted to the 25 to 35% off range. The are also looking at a strategy to acquire deals from out of the area day trip, such as HiltonHead, or Savannah, and to offer Flash deals, a new Second Street platform aimed at short deals, primarily for restaurants, in which an eblast, say at 10:30 am. in the morning, may allow just a two hour window to pay and redeem the deal.  Contests such as the Battle of the Bands, also using a Second Street platform, continue to build e-mails. An Affiliate of the month program helps train merchants and sales people on best practices. 

Sumary: Keys to this small market success including having - and continuing to build - an existing email list; an aggressive, dedicated sales team; launching with high profile merchants  and focusing on categories where readers can justify spending, such as dining, entertainment and beauty.

Please find a copy of the ROI Calulator in Second Street's resource center.  For a check list of these best practices click here. Many thanks to Second Street Media's CEO Mat Coen, and Director of Affiliate Services, Julie Foley for sharing this webinar with our members, and to the executives for sharing their expertise. The webinar and training materials are terrific, and provide and unusualy high level of customer training and support.

Alisa Cromer

The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and  MediaExecsTech,  developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine,  to showcases perspectives from around the  world on new topic each month, translated from and to the top five languages in the world.

second street, group deals, daily deal, calculator