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Email Drives Daily Deal Websites: Page 2 of 2

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However, while Groupon asks users for their preferences, it's not clear "whether or not Groupon actually uses this information to improve their offer targeting," according to the report.

In general, the flash sale sites seem to be doing more with personalization and customization of messages, Trivunovic said. Typically, they send the same assortment of offers to all recipients, but the featured offer might be different for a new mother, as opposed to a single young professional. The data driving that personalization can be either preferences recorded in a profile or observed behavior, such as the types of offers that customer has responded to most favorably in the past.

To do that well, you don't want to be too heavy handed, Trivunovic said. "This is where a lot of marketers get it wrong," she said, by making customers feel like they're under surveillance. By making the suggestion a little more subtle, you can deliver offers that come across as a pleasant surprise. "You want them to say, 'Oh, gosh, that's just what I'm looking for,' by creating offers that resonate with the customer, without freaking them out."

Bettinelli said another way HauteLook personalizes messages is by varying the inclusion of 100 different messages it has defined for different stages in the "lifecycle" of a customer. "The messaging will be slightly different for everyone, where if they're early in the life cycle maybe we tell them more about shipping and returns," he said. On the other hand, for longtime members who are already familiar with those policies, the emphasis can be more directly on what's on sale tomorrow, he said. If the system detects you've been responding to messages from your iPhone, he said, it might also slip in a message saying, "Hey, did you know we have an iPhone app?"

Nordstrom paid $270 million to acquire HauteLook in February, but HauteSuite continues to operate as a separate business, not merely a channel for remaindered items from Nordstrom stores. Although flash sales may have started as a way of selling excess inventory, they are increasingly recognized as worthwhile sales channel in their own right, Bettinelli said.

A recent New York Times article supported the idea that flash sales can build long-term brand equity.

While it's true that there a lot of daily deal companies, "there are only a few really good ones, and the really good ones are getting a lot better," Bettinelli said. One of the ways HauteLook will keep getting better is by refining its email strategy, he said. "A thousand days ago, it was just about how big your list was and how many messages do you send. As the space becomes more crowded, customer expectations rise. You need to have a relationship with every member. It isn't just about getting an email every day."

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