Daily Deal Websites Push Premium Memberships
Are the new membership programs worth the money?
As consumers tightened their purse strings during the recession, daily deal sites like Groupon.com and LivingSocial.com connected these budget-conscious consumers with deals at restaurants, spas, and other businesses. Market research company IBISWorld estimates that the daily deal industry's revenue could rise to nearly
"Everyone is running a daily deal now," says
Perhaps that's why several daily deals sites have expanded their business models to include premium loyalty programs. For instance, LivingSocial launched LivingSocial Plus in November, Groupon is testing Groupon VIP in several markets, and Saveology recently introduced Saveology Elite.
Here's an overview of what these programs offer:
Groupon recently offered a free three-month trial of Groupon VIP to certain subscribers in
Are these membership programs worth the money? That depends on how many daily deals you typically buy and whether you shop regularly at one of the aforementioned sites or tend to be site-agnostic, shopping wherever there's a deal you want.
The average daily deal consumer actually buys only four deals per year, according to Krasilovsky, so unless you're a die-hard deal-seeker with a strong loyalty, you may be better off just buying the deals that catch your eye instead of paying extra for a loyalty program. Getting an even deeper discount through Saveology Elite Dollars or LivingSocial Deal Bucks may be enticing, but most of that money does not roll over from month to month.
And as Agranoff points out, many of the merchants who offer discounts through daily deal sites work with multiple sites, so it's likely that a sold-out deal may show up elsewhere in a few weeks or months if you're willing to wait. With so many new deals filling up consumers' email boxes on a daily basis, the ability to shop sold-out deals may not serve much of a need.
Then again, having the flexibility to exchange unused deals for credits, as offered by Groupon VIP, could be a useful feature, since it reduces the likelihood that you won't be able to redeem a deal because of time constraints, an unanticipated move, or other factors.
Typically, you can still use a voucher for the amount you paid for it after the promotional value expires. You can also resell unexpired vouchers through secondary markets like CityPockets.com and DealsGoRound.com. However, a
Krasilovsky says it's too soon to tell if this premium membership model will pay off for daily deal sites. At the individual consumer level, though, it's relatively simple to look at your account history and assess your buying frequency.
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Personal Finance - Daily Deal Websites Push Premium Memberships
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