Technology for the Daily Deal Business, Email Edition

We will continue to do our part to highlight some of the technologies used by daily deal sites in order to improve the effectiveness of their operations. We are in an advantageous position in this industry where we get to speak with executives from dozens of deal sites across North America and industry service providers every week, all the while learning some of the best practices used to drive operational effectiveness within this industry.

No, we will not write about CRM or Accounting solutions, rather, over the course of this blogging series, we will highlight technologies used specifically by Deal sites for their main ecommerce platform, Aggregator technologies, Scheduling technologies, reward technologies, advertising platforms, social technologies  and for the purpose of this post, Email Technologies.



Email Deliverability

If there are any truths to the Daily Deals business it is this:

  1. Customer Acquisition is King.
  2. Merchant Acquisition is Queen
  3. And delivery or distribution of deals is Golden.

Although more and more consumers are seeing and buying deals directly from the deal site, from their mobile or from an aggregator, email distribution is still the #1 method of delivery.

The Impact of Inbox Delivery: a small increase in open rates from email campaigns can translate into rather significant increases in revenues for Deal Sites or aggregators. It is, therefore, a bit surprising to me that the majority of deal sites still do not have technologies in place to improve email deliverability, open rates, etc.

Given that the average cost per email acquisition nowadays is between $4-$8, (in other words, expensive) it would make financial sense if deal site owners/managers do whatever is necessary to get those emails opened and increase conversions. The cost to acquire new subscribers is just too high to ignore better email management.

How can sites improve deliverability? Here are some basic guidelines provided by Returnpath, the industry’s largest whitelist: (Returnpath is also one of our sponsors)

  • The first step is to make sure your domain and IP reputations are in good standing.  This will help with your email delivery to the inbox.
  • keeping your complaint and unknown user rates low
  • sending a consistent mail volume and not hitting any spam trap addresses
  • limiting html images and graphics
  • Ask your subscribers to whitelist/approve you as a preferred sender so that your emails are given preferential treatment in their mailboxes. This will also help with images and links being enabled by default. If you are not on the whitelist, then your images and links are probably being disabled by default in the receiving ISP.  This means that subscribers aren’t seeing your designs and aren’t able to click on any links until they choose to manually download images and enable links. Without being able to see your images and take action on your links, your subscriber cannot take any action on your emails. This represents a major hit to your potential revenue.

Beyond the above points, we recommend to all our clients that they consider signing up for a whitelist service. This will enable your emails to be delivered to inboxes with images visible at both Yahoo and Hotmail/MSN, which are two of the world’s largest and most used ISPs. We are partial to Return Path’s Certification program not because they are a sponsor, but rather due to the important fact that they are the industry’s largest whitelist. The cost is minimal and the benefits are rather crucial to receive.

As stated, improving delivery rates, even by a small percentage, can have a great impact on revenues. One case study that is relevant to our industry is Return Path’s work with Groupon. The Return Path case study states that “once certified, Groupon saw improved open rates and an increase in click-through rates of 6%,” which, based on their list size can impact millions of dollars in sales. If you’d like to take a look at the full Return Path case study on Groupon, you can find it here.

Daily deal businesses essentially rely on email as their engine for growth. Ignoring deliverability and open rates is suicide in this extremely competitive industry.

Next up in our series on Daily Deal technologies, Daily Deal ecommerce white label platforms. We’ll look at the various players and suggest a handful to consider.