Hot Sauce uses MarketVolt technology to host their email marketing campaigns, shown is their logo

A confession: I’m a Hot Sauce junky. I’m not talking about the peppery extract you sprinkle on food. I’m talking the online coupon vendor that delivers daily deals from local businesses. Every morning, I dash to my computer and check my inbox for my daily fix – an offer to purchase products or services at a deep discount, usually around 50 percent off.

I subscribe to several coupon vendors including Hot Sauce, St. Louis Half / off, and Groupon. As both a consumer and a marketing consultant, I love the model.

The model is simple: Create the offer and let the coupon vendor pitch it to a massive subscriber list. You reach thousands of leads without spending a penny on advertising. You and the coupon vendor split the revenue from the coupon purchase, and you get a wave of customers who redeem the offer. This can be a great customer acquisition tactic.

Here’s the challenge: Your margins could be razor-thin. Some businesses lose money on these deals.

So why bother? Because everyone who redeems the offer could become a repeat customer and a reference – if you have a plan to accomplish that. Getting them in the door is just the first step. How can you get them to return? How will you entice them to refer others? What can you do to get them to rise from a small-ticket customer to a big-ticket customer? In a future post, I’ll answer these questions and reveal ways to maximize the lifetime value of your customer relationships.

(This article first appeared in St. Louis Small Business Monthly which publishes a monthly column, High-Voltage Marketing, by MarketVolt’s Tom Ruwitch.)

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