It's pretty clear at this point that, for better or worse, Daily Deal sites are one of the "next big things" in local internet marketing.  Companies like Groupon and Living Social are certainly leading the pack here, but it was also recently announced that Facebook will get in the mix with a test in a variety of cities.      

As a provider of local marketing automation software, we're asked on a regular basis whether or not this tactic should play a role in an overall local store marketing strategy.  The simple answer here is a resounding yes - you should absolutely consider this approach as an overall compliment to your local advertising plan.  However, this recommendation comes with a series of caveats that could easily push you to decide that it's not the right thing.  In no particular order, these caveats include: 

• Test, test and test.  Please, whether you're a national brand or a small local business, don't go into the daily deal waters lightly.  Horror stories around these tactics (read one of the more famous one, Posies Cafe, here).   Also note that a recent survey indicated that 55% of small business that have implemented this approach would not do so again.  
• Understand the financials.  If you've read the Posies Cafe example above, you'll see a clear example of not understanding the financials.  While financial models vary, the most common is a 50% discount with the daily deal provider then keeping 50% of the revenue.  This results in 25% to the local business - understand this and build it into your projections.  
• Focus on the fringe.  Don't discount your "bread-and-butter".  If you're a coffee shop, don't discount lattes and mocha's - instead discount pastries and whole-bean coffee.  Your goal is to bring the customers in and up-sell and cross-sell them on other items.  
• If you're the national brand (franchisor, product manufacturer, etc.) - it's your job to provide guidance.  You need to run the tests and give the learnings to your local affiliates ASAP - they're getting sales calls on this NOW and need to understand best practices for their market.  
• Don't over-estimate return customers.  Daily Deals bill themselves as a great "trial/customer acquisition tool" and they can be just that - but you also have to consider that a significant collection of the customers will be "deal hunters" and are not expected to return.  Don't assume a 75% return rate in your financial analysis or you'll be disappointed.  
• That said, ensure you have a plan to capture as many customers as possible for the long-term.  Local store marketing is all about driving relationships at the local level.  
• Set limits and be prepared/staffed.  Most of the daily deal sites allow you to limit the purchases available.  Seriously consider this approach as it limits your exposure.  Also, ensure that you're staffed to meet the demand - an understaffed organization can quickly turn what should be a positive experience into a negative one.  

The overall guidance here is that daily deals have the potential to add significant value to a complete marketing program, but approach them with caution.  Make sure you understand what you're doing and why you're doing it before turning on the spigot.