When Facebook offers started rolling out a couple of weeks ago, it didn't make the huge impact on the industry that many thought that it would. However, it looks like those who didn't take the feature seriously at first may begin to take notice.
A hotel in Ireland that has been testing the offer has been able to drive over $1 million of revenue in just 24 hours. As you can see from the offer itself, it has been claimed by 27,000 people at £42.50, which comes in well over a million and that number is rising fast. Now it's important to note that no cash changes hands with these Facebook offers and it is up to the person who has claimed it to show the offer at the hotel in person or on their phone. As a proof of concept for Facebook deals and social commerce in general, this looks like it could be the start of something very, very big.
The reason this deal is spreading so fast is because of the huge viral reach of Facebook. I clicked on the deal because I noticed it popping up in my news feed and three of my other Irish friends had done the same. This is how close to 30,000 people have claimed the deal in such a short period of time and it acts in nearly the same way as sponsored stories do on Facebook.
Claiming The Deal
The real beauty of the Facebook offers service is that, unlike Groupon or other deals sites, you don't have to sign up for anything and all it takes is one click to redeem the offer. The offer gets sent to your email address and to claim it, all you have to do is show up at the hotel and present your phone or print it out in advance. The email that you get looks like this:
Can They Even Handle The Business?
So when you consider that 30,000 people have signed up to claim that deal, that works out at a possible 3,500 people arriving every single month until the deal expires (Dec 31st 2012). That works out at about 850 rooms per week or 100 odd rooms per day from now until the end of the year. I'm guessing the hotel doesn't have 100 rooms that they can give up daily and while not everybody will claim the deal, this could end up being a serious issue here. What the hotel didn't realize was that they could cap the deal at a certain amount of people, which given its huge success would probably have been wise.
Social Commerce Has Arrived
This is the start of something really big. At the moment, only select partners can use these deals, but very soon they will be getting rolled out to all Facebook pages. The best part is that (for now) Facebook doesn't take a cut from the deals as they expect to generate further advertising revenue from people wanting to push their deals to a larger audience. The only worry will be the balance that will need to be struck between having something useful and a news feed full of cheap and nasty deals. It is certainly very exciting though!