Despite the fact that there are still about 150 daily deal sites in Canada, and despite the fact that costs in growing a profitable deal site are rather high, I still receiving inquiries every week from entrepreneurs wanting to launch a new deal site, or from existing deal site owners wanting to grow their site further. I applaud their willingness to pursue success in this industry. It is an exciting industry that attracts many. However, I question many in terms of their ability to actually launch and grow a successful deals business.

There are many best practices, obstacles or focus points that need to be looked after by operators of a Deals business; Be it marketing for customer acquisition, operational effectiveness to keep costs down, to technology management in terms of providing users with a technology platform that your business can count on. However, there is one area that is so vital to the Daily Deal/Group Buying business that if ignored or done half-assed it will eventually lead to a lack of success in this industry. It is still shocking to me how many present Daily Deal business owners have no experience in this area or have few staff experienced in this area. It is even more shocking, no, disappointing to me that entrepreneurs who contact us every week seeking advice lack this one fundamental business necessity, not only to drive the success of a Daily Deals business, but any business.

So what is this nugget of gold?

If there is one aspect that a Deals business requires as its life blood more than anything else, it’s merchant inventory. (assuming product inventory is not 100% of the inventory). In order to obtain merchant inventory, merchants/retailers actually have to be approached…often! Yes, this may sound obvious but it is underestimated. If sales and eventually sales management is not a forte, then may I be as straight forward as I can in saying that the Daily Deals business is not right for you. (there are exceptions..some are stated below)

In order to have a month filled with, say, 20 local merchant offers or more, then your sales team needs to communicate with atleast 2 -5 times as many merchants in any given month. (depending on your team’s closing ratio)

Having 20 merchants closed (and operationally ready to post a deal), means that presentations and discussions need to have been had with atleast 40-60 of them.

In order to present to 40-60, atleast 100 or more need to have been approached, prospected, etc.

If you have several sales reps working with you, then sales management skills come into play. Sales people cannot and should not be left alone…too often. Most will take the path of least resistance. That is simply human and sales nature. A good management system must manage their actions and NOT their results. Meaning, either they will hit their sales target or not, you cannot manage results. Rather, you must manage the actions they need to take to get those results. In other words, manage and follow up on their prospecting numbers, the amount of merchants they reach out to per week, how many they present to and finally how many they close.

Meet once a week with each rep to discuss and follow up on individual goals, targets, attainment, prospecting, etc. Meet with the whole sales team once a week to discuss the same. Call each rep at talk for 5 minutes at a minimum 3 times per week to “measure temperature” of their performance for that week.

Take the above and do it again, and again, and again, and again…..every week, every month. In the daily deals business, your sales start at zero every month. Thus, the sales process is a wheel that can never stop turning or take a breather.

Your entire business is dependent on how well the sales team executes their actions to eventually reach their sales goals. If they don’t prospect, then they don’t get to present to enough merchants, which means not enough merchant inventory, which means not enough sales.

As such:

  1. If you do not know what a sales closing ratio is, then the Daily Deal business is not for you.
  2. If the thought of following up and managing your sales reps constantly, every day, every week, every month makes you, well, sick. Then the daily deal business in not for you.
  3. If you personally will have trouble managing a sales team, then either hire someone competent in that role or move on.
  4. If you, the founder, is the one doing the selling and you cannot stomach the constant grind of sales or the persistence that the sales process requires, STOP, hire a sales rep immediately, deal with it or get into another line of work.
  5. If your team talks to 100 merchants per month, but only 10 close. Then your sales team is either approaching the wrong merchants or their presentation and sales skills suck. Please manage accordingly. If on the other hand, you have 25 merchants approached and 10 merchants closed, well, your sales team lacks prospecting skills. Their presentation and sales skills seem good, but they are either lazy, shy, or they are not driven enough to approach more merchants. Again, manage accordingly.
  6. Understand that you must always be on the prowl for good sales reps. You never know when you will have to fire an existing one


Given the management expertise required in securing local merchant inventory, it is no surprise why many deal sites, especially the smaller ones, have opted to focus on filling the majority of their inventory with products. Securing good products with good terms takes a buyer, not a sales rep.

I will repeat the lesson once again in case it is not clear:

If sales or sales management is not your forte, or you cannot hire someone experienced to look after sales, then I highly recommend focusing your time, energy and investment dollars on other ventures. (or focus on product inventory instead of local merchant inventory)

The daily deal space requires a complete and persistent focus on the sales process. Not doing so is suicide. Manage accordingly.


Some exceptions (there are always exceptions):

The rigors of the sales process will not be felt as much if you operate a popular portal of some kind where adding Deals is seen as an add-on. The fact that it is an add-on will not detract your operation from its core purpose. Daily Deals will simply become another “Ad Unit” for your advertising team to offer. This holds true for media portals, news portals, local news or local activity portals, niche information portals, etc.