To Cap or Not to Cap? With Deal Commerce, That is the Question

CAP?

Group deals that become runaway hits can often produce new challenges for local business owners. Will you have enough goods available to fulfill every request? Will you have enough personnel on hand to ensure each customer is treated perfectly? Adding a cap (setting a maximum limit for the amount of offers that can be purchased) could be a tactic that makes a rush of new customers manageable from the start. But will capping your group deal help or hurt it in the long run?

PROS of Capping Your Group Deal:

  • Gives you more control over how your deal is redeemed. By knowing ahead of time the maximum number of traffic you can expect to receive from your group buying deal, you can ensure you have enough staff and product to go around before your deal goes live.
  • Empowers you to provide happier customer experiences. Making sure your business is able to fully satisfy every customer can make the difference between a jilted customer leaving a negative review about their experience online, or a new customer returning again and again. This is especially true of businesses that require a high-touch service component, like restaurants, spas & salons, recreational activities (like golf or rock climbing).
  • Still gives you a high level of brand awareness. Even if you cap the number of offers that can be purchased, your business name gets the same amount of exposure as if you did not cap your offer, which means less risk for your local business.

 

CONS of Capping Your Group Deal:

  • Could be unattractive to some group deal publishers. For most group buying deal sites, it’s in their best interest to publish an offer without a cap because the more vouchers that are bought, the more money the group buying deal site makes.
  •  May cut your potential success short. In terms of potential revenue from the initial rush of voucher redemptions as well as potentially acquiring new lifetime customers, capping your offer could limit the maximum success you could achieve with a group buying deal.

Once you decide whether or not a group buying deal is right for your local business, it’s up to you to determine whether a cap is going to be in your best interest. It’s worth noting, however, that some group buying deal publishers don’t even offer the option to cap your deal. So make sure you’re partnering with the right deal publisher who can work with you to create and run a group deal that will be a net positive for your local business. Better yet, always make sure you run with a deals platform that offers consultative guidance every step of the way, especially when it comes to crucial details like deal caps.

Have you or someone you’ve known run a group deal that would have benefited from a cap? Would you prefer having the option to cap your group deal? Leave a comment and let us know what you think.

Angela Epley writes about online advertising & web presence for the ReachLocal blog, which focuses on small business online marketing strategies.

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