Groupon and the likes?

Hi Estys,

 Just wondering if any of you feel that Groupon and the likes are not going anywhere should we fall prey to it or should we come up with a great deal of our own to build clientele? My question falls behind the thought that Although we don't like these deals, they are able to reach an audience that most of us dream of. Perhaps selling of a membership on groupon vs. a service in which a client receives a discount for the services vs. half of the price...if that? What do you think?

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Permalink Reply by Amy Sherman on March 8, 2014 at 7:31am

I am totally dealing with this right now Melissa Markis.  Thanks for putting this in perspective for me! I really needed to hear it.

Permalink Reply by Jules Rose on April 23, 2014 at 12:52pm

Do you need a  contract for a membership?

Permalink Reply by Danielle Lawrence on August 3, 2014 at 12:45am

What is your structure for your membership program? I have been thinking about implementing one but don't know where to start :/

Permalink Reply by Amy Sherman on March 7, 2014 at 7:41am

This opened a whole new perspective for me! I am considering doing one of these myself! THANKS KIM MILLER!!!

Permalink Reply by Ann Gallagher on March 7, 2014 at 1:42pm

This has some very good info about Groupon and similar offers:  

http://gracerileypublishing.blogspot.com/2014/02/tips-to-make-money...

Permalink Reply by Samantha Maline on April 17, 2014 at 8:21am
Yeah, I had a bad initial experience too so I cut it off before it went live. I might try it again after reading this post.
Permalink Reply by Marty Glenn on April 17, 2014 at 9:26am

Shai

The only thing I have ever known about coupons and the Groupon and likes of the world is this and it more or less boils down to human nature then actually the medium:

When a person pays for something they attach a value to it and second they attach the reward (service or item) to that dollar amount. So even though they knew it was a special offer they will not mentally want to pay more and or it will be difficult next time and for me that is a big part of why I think all coupons and or discounts are bad.

Now with that said, there are too many people and businesses that swear by discounting so as long as you have your ducks in a row and you stress the reason behind the discounts, maybe that will help combat the above issue.

Best of luck

Marty

SkinCareScience.com

p.s.  From 1993 - 2004 I owned a direct mail marketing company in CA (i.e. Money Mailer / Penny Saver /JB Dollar Stretcher / ValPack) I mailed 250,000 a month. I watched businesses get destroyed by over use of coupon direct mail.  One of the reasons I got out of the business is because I could prove with math how it was bad and destroyed the ability of a company to make money and grow. With that said, my post stands as my best advise from the vast experience I gained while dealing with every single type of business within a community including skin care professionals.

Permalink Reply by Karen Winters on April 17, 2014 at 2:49pm

I have never used groupon but have used living social,which worked great for me, but the key is to only do it once at the most twice a year for different services.  I have seen too many salons and experienced estheticians in my area,out of desperation due to lack of clients, bad economy and competition, run the groupons too many times that they are starting to rely on them for income.   It has also damaged their business with negative yelp reviews and people never want to pay regular prices. I saw one salon go from 5 star reviews to 3 star reviews after they did a living social. When I did my living social, I only did it once, I had just bought an infrared sauna and sold 3/ 40 min session packages and when they would book, I would up-sell them to a facial or body wrap. It worked great since the sauna is no labor, just turn it on, towels, aromatherapy and your done. Also look around and see what is already being sold in your area. Everyday groupon has one facial or massage at some spa, so they are starting to become a dime a dozen. Sell something unique or a signature facial that is unlike what anyone else is doing and be descriptive in your AD.

Permalink Reply by Shelley Hancock on April 17, 2014 at 3:01pm

I recently moved to a new town and I've purchased quite a few Living Socials so I can check out the businesses in my new area. I tell you that to say that not all couponers are lookie lous! I have ended up being a repeat customer for quite a few of these businesses because I liked the service. It has made finding new carpet cleaners, house cleaners, restaurants, etc. easier on the budget in a new area.

As for my skin care business...we've had great success with these ads. We ran our first one way back in 2011. You don't want to overdo it but we will occassionally run another one to boost business. I've written an article about it here. Scroll down this page: http://www.shelleyhancock.com/businessideas.html

Permalink Reply by NBSkinCare on April 21, 2014 at 9:14pm

I've run my share of Groupons (2 when I was in a studio by myself to promote and build clientele) and 1 for each of my new hires last year to help them stay busy and build clientele.

Pros: brought people in the door; filled gaps for new Esty and new MT; gave us exposure in our new space

Cons: grouponers/couponers are much more likely to complain about dumb stuff; abuse of coupons (i.e., buying 2 for themselves when it explicitly states one per person, or buying a set of 2 massages and wanting to break it up for 2 different people when it states non-transferable, etc); letting them expire and them reaming the business for not reminding them (!! yes, seriously, a lady got pissed that *I* didn't remind her to use her Groupon before it expired... like that's my job)
Also, you make next to nothing, in reality.  Especially if you have to pay employee or IC to do the service.

Honestly, we got some fabulous, regular clients from it... but the hassle was not always worth it.  Grouponers in general have unrealistic expectations and come in, sometimes, with a chip on their shoulder (like they're expecting bad service because they're using a coupon...?)  I've had them show up 40 minutes late and *demand* service (which they didn't get), scream and yell and cuss me out for no obvious reason that I could figure, no show and then demand that I let them reschedule (um, no again); show up with their children, their dogs (!!),
I've had Grouponer's try to defraud me, try to get service and then not give their Groupon to me (essentially stealing the service), no shows galore (despite giving them reminder emails and texts) and then those that show so late and then scream obscenities at me when I say I cannot do their service (again, YES!  really happened, lady went ballistic!)

So... know what you're getting into, know that you need to set IRON CLAD terms in your Groupon, and know that 80% of them are just looking to get a deal and they don't value your service or time (well, they value the service, but not at your price...)

THIS year, as a spa owner now, we no longer discount.  No more 'specials' no more facials of the month or FREE services, etc etc.  If clients want a discount, they either Pre pay for a series of treatments or, beginning next month, they can join our Membership and save a good amount each month on their treatments (but its regular, steady income for us and still way above what we need to charge to turn a profit).

Lastly, when we ran our last Groupon, back in September, I noticed that our area was so over saturated with these deals that we literally barely sold 20... when the previous year, I sold 200!  And we had a new, beautiful location, 5 star ratings, etc.  It was just that the Groupon buyer could literally choose from 4 or 5 in the area for basically the same deal.  And Groupon now lets merchants run their ads indefinitely, so the company that's been running theirs for 4 months has sold 250 and the 'new' company running theirs for the first time this month looks like they may not be as good cause they've sold 10.

Just be careful.  And like another poster said, run something that makes sense, something new and interesting, anti-aging anything sells well, microderm generally sells really well, or put together something that you can easily add services onto when the client is there so you can make a little more per service (and Groupon can't take  part of that!)

Permalink Reply by Zenaida Fiducioso on April 30, 2014 at 1:11pm

Hi Shai, Groupon and other coupon type companies have helped my business immensely. Yes, you're able to reach the masses quickly through these companies. As far as the big bucks, retention is important - that's the part that will pay off. The coupon companies are great partners if you value your business relationship. I like where you're going with the membership notion: perhaps introducing the service via the coupon, and then segue to other services you offer (membership, packages, etcetera). Offer a second visit at a discount if the customer is not sure about consecutive visits with your company. Sometimes it takes more than one time to convince a good, picky customer.

Permalink Reply by Wendy young on June 30, 2014 at 3:06pm
I'm intrigued at the concept of groupon. I'm a new esthi and trying to build my clientele is challenging. I'm also a massage therapist though, so I suppose it'd be fairly easy to do a package of some sort.

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