To underscore how service biz oriented the daily deal sector is, I looked at my morning deal selesction so far:
-a $5 for $10 restaurant deal
Four of these are low variable cost services that, if excess capacity is available, can be offered cheaply. As long as the business operators don't schedule so many deals that they have to turn down full price business, they will boost profits and meet new prospects they can try to convert into long-term customers.
The $10 restaurant coupon is the exception, but the value is low enough to avoid major damage to the restaurant's bottom line and is probably a cheap way to acquire new customers.
There's likely a little benefit from the mailing, too. Each one is a potential branding impression, and the more appropriate the target the more likely they will study the offer and perhaps even click through to the website.