Merchant Circle SMB Survey: 12% Have Used Deals

How many small businesses have done a deal at this point? 12 percent, according to a new survey of 2,500 SMBs by Merchant Circle. That’s about a third higher than Merchant Circle’s June survey.

The survey also found a lot of Facebook ad usage. About 23 percent of local merchants report having tried Facebook Ads to date, which is five percent higher than in June. Sixty-two percent said they would use Facebook Ads again, citing ease of use (again, 62 percent) and the ability to start and stop campaigns (55 percent). Those that won’t do it again say it didn’t do much for customer acquisition (66 percent) and the ads were too expensive (41 percent).

Despite the Internet horror stories of bagel stores and cupcake stores going under because they oversold on Groupon and other deals sites, deals generally work well for SMBs. About 75 percent of respondents say they would offer another deal in the future. Sixty-one percent cited customer acquisition as the best thing about deals. Thirty-seven percent also said that deal profitability was a major reason to do another deal, up from 24 percent in June.

It is not all rosy in Merchant Circle’s survey, however. Twenty-five percent of SMBs that have done a deal said they wouldn’t do it again. Of those, 42 percent said it was not effective for customer acquisition, 36 percent said it was too costly and 34 percent said they lost money on the deal.

When choosing a deals publisher, 64 percent of the SMBs cite costs (i.e. commissions) as their top consideration. Local targeting was cited by 57 percent, and local reach was cited by 52 percent.

What is especially surprising in the survey is how many deal-using SMBs report having tried Google Offers, which just launched this summer and is now past 30 markets. Nineteen percent of deal-using merchants have already tried Google Offers, compared to 26 percent for Groupon and 21 percent for Living Social. Forty-three percent have tried other deal providers. We know from experience that many SMBs don’t actually know what vendors they use for different things, so we’d suggest some room for margin of error here.