When it comes to choosing which daily deal sites to work with, reputation matters. Commission rates and profit margins for small businesses working with traditional deal sites are nearly identical—with most sites taking a 40 to 50 percent cut off any vouchers sold—which means merchants are usually looking at other factors when deciding where to run their digital promotions and campaigns. AmazonLocal has been able to use this to its benefit, capitalizing on the relationship its parent company has built with customers and using Amazon's reputation as a marketplace leader to its advantage.
How It Works
Consumers in more than 100 regions across more than 30 states can sign up to receive daily emails from AmazonLocal featuring deals from businesses in their local communities. Once a consumer subscribes, AmazonLocal begins sending deals worth up to 75 percent off at nearby restaurants, spas and entertainment venues.
In addition to promoting its own deals, AmazonLocal also promotes deals that have been sourced by third-party companies like LivingSocial. Customers can quickly purchase any attractive deals they come across by logging in and using the credit card information they've already saved in their basic Amazon accounts.
AmazonLocal in Action
Local merchants looking to attach themselves to Amazon—which has been rated the most reputable brand in the country according to a 2011 survey by The Reputation Institute—can use AmazonLocal as a way to get noticed by customers and establish themselves in a crowded marketplace. Unlike other digital marketing platform, AmazonLocal doesn't charge merchants any upfront fees to use its services.
To run a deal with AmazonLocal, SMBs simply reach out through the company's online contact form and wait to hear whether they've been accepted. AmazonLocal provides merchants with a team of salespeople and writers to create their deals and craft compelling editorial content to persuade customers to click "Buy." Business owners can keep track of how many vouchers they've sold on the days their deals run, and they can expect to receive a payment from AmazonLocal for all the offers purchased—minus a referral or commission fee—once their deals have closed.
Why It Works
By running a deal with AmazonLocal, businesses can create the perception that they are somehow being "endorsed" by the Amazon brand. This is a boon to new establishments looking to gain a foothold in their communities, since it helps create a sense of trust among consumers. Startups and new businesses also benefit from being able to run large-scale promotions with zero upfront costs, since AmazonLocal takes a cut off the back-end of deals rather than charging an upfront fee for using its services.
AmazonLocal's customer demographics also make the deal site attractive to small business owners. Amazon claims its visitors spend "88 percent more money online every month than the average Internet user," which is an important statistic for businesses looking to target customers who can afford to come back and pay full price for their products or services once their vouchers have been redeemed.
Maximizing the Benefits
In addition to publishing deals through e-mail newsletters and its own website, AmazonLocal also promotes deals through local Twitter feeds in each of the markets it services. Small business owners can extend the reach of their promotions and attract even more buyers by retweeting their AmazonLocal deals and promoting their offers on Facebook, Foursquare and any other social networks they use.
Small businesses would also be smart to solicit contact information from customers who redeem AmazonLocal vouchers in their stores and restaurants, to be used in follow-up e-mail marketing efforts. Merchants who collect this information can significantly increase their chances of retaining a higher percentage of first-time customers who've visited their establishments because of their discounted AmazonLocal deals.
Read more "How It Works."
Stephanie Miles is an associate editor at Street Fight. She is based in Portland, Ore.
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