This article makes a good point. It’s titled How To Compete With A Million Other Groupon Clones: Find A Niche.
Many small businesses I’d likely never hear about otherwise send me their coupons this way. I receive them mainly to see what’s up… because the city I receive them from is 2 hours away, I don’t expect to take advantage of them.
I have noticed that for the most part, these are not large mainstream businesses. They are small businesses – spas, bakeries, etc. that likely don’t have large advertising budgets.
But there are many more competitors, including Daily Deals.
They conclude that niche sites do better and, in the long run, will have a higher profitability.
The key is to get a huge email list. The more predictable the behavior of the list the higher the ad rate a customer will pay to get that message out.
After all, if you’re a day spa, would you rather send your message to 10,000 guys like me sitting in the sticks 2 hours away that signed up on a lark to see what coupons they’d get? Or would you rather send your message to 10,000 desperate housewives who think getting a deal on a spa day is just what they deserve after changing a stinky diaper?
In small towns, you’d likely choose a different niche. People who go out to buy lunch or something. But as they suggest, the key is the niche.