Groupon: It's a love/hate relationship.

My boss is a crazy person. We are a generally high volume waxing salon. We do a lot of business. But then there are THOSE months...we slow down, we don't make as much money, the phones aren't ringing, and my boss gets the idea in her head that we need to do something to bring the clients in. Guess what she does? 

GROUPON.

Look. I get it. Deals bring people in. A person who has never heard of us will see the Groupon, buy it, come in for a service, and we have a new client for life! Yes! That's exactly what happens every time!

Wrong.

If you haven't promoted your business through Groupon, lemme break it down for you: We put a deal on Groupon for $10 off a service. Client buys. Groupon gets half. Business gets other half. I get commission off of that half. In the end, I don't make much. Also, people don't always use their Groupons immediately after purchasing. They hold on to that deal until right before it expires. Then I'm assuming Groupon sends out a reminder email or something, like, "Hey, use that thing, it expires in two weeks." So then we get this influx of discounted services. I swear I did like 7 Groupons the other day. I thought about jumping off a bridge. My paycheck is taking a huge hit.

I texted my boss with what I thought was a great suggestion! "Hey boss lady, why don't you start giving us 50% of those Groupons so instead of quietly wishing bad things upon those clients, we love them just a little bit more than everyone else?" Her response? "Well I hardly make anything off of them, so...no."

So basically, instead of shelling out a few hundred/thousand/however much money for actual ADVERTISING, my boss has her employees, in a way, paying for her advertising, if you really think about it. We've sold over 800 Groupons. Yes, that's wonderful in theory. However, let's list the reasons why it sucks:

1. Many Groupon clients do not tip. Or they do not tip on the pre-discounted price.

2. Some people are what I like to call "Groupon Surfers." They use Groupon for EVERYTHING. They have one for every spa in town, and we're just the one they chose to use this month. We'll never see them again.

3. Some folks come in with a chip on their shoulder, expecting a less than stellar service because they are using a coupon. They are extra picky, rude, and have this sense of entitlement that is just ridiculous. I love making these people love me. It brings me joy. Like, "HAH! I win. Tip me."

4. Existing clients don't read the find print that says FIRST TIME CLIENTS ONLY. They buy the Groupon, even though our prices are already low, and then they whine when they can't use it, like it's our fault they don't know how to read. 

5. I get paid about the same for a Groupon Brazilian wax as I do for a regular priced eyebrow wax, but I'm still taking the same time and care as a regular priced Brazilian. Shoot me.

Sometimes, you get a new, wonderful, great tipping, loyal client who comes to see you and only you, religiously. Sometimes. But that is not always the case.

One day, I will write a book on how not to do business. How not to treat your employees and clients. One day, I will be a successful business owner, and I will look back on this and laugh. But right now...I hate Groupon and if it were a person, I would pop it in the nose.

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Replies to This Discussion

Permalink Reply by Victoria Prinzo on October 16, 2015 at 8:57pm

You are absolutely rigth Zenaida.

Most people go into a Deal campaign with the wrong mindset.  

I owe Groupon, LivingSocial and the likes a big part of my success: they brought me the clients , and the rest was up to me.  I worked super hard, treated them like rockstars, never "diluted" my services, and offered them other deals I created.  I have been in business for 4 years and 70% of my existing clientele found me through deals.  And you know why they stick around? Because they get treated like lesser costumers in many other places.  Why would they continue to look elsewhere if you offer fabulous services and treated right ? Sure, there are deal hoppers, and if your prices are very high for sure you will have a harder time retaining deal buyers, but if you compare the $10 or whatever you end up getting per facial from Groupon vs $500 a month you have to pay out of pocket for an ad in some newspaper that may or may not reach your demographic, well, you do the math.

We live in a social media economy and deal buyers are the ones who yelp, tweet, follow you on Instagram etc.  More importantly, Yelp.  Through Yelp alone I have also found countless loyal clients.  And even when not all clients stuck around with every campain, they still are the best advertisement there is: the living, walking kind who tell their friends about your services!  

Permalink Reply by Zenaida Fiducioso on October 16, 2015 at 9:04pm
There it is, my testimony is similar. Retention takes work, time, and genuine care. I've been in business 5 years also because of companies like Groupon and Yelp.
Permalink Reply by Karen Winters on October 25, 2015 at 3:38pm

 Hi Zenaida

Thanks for your positive insight as this post couldn't have come at a better time. Over the last few weeks I've  been contacted numerous times by Groupon to run a coupon and have always been against it, (Too many horror stories), but since adding new services, I have reconsidered. What is the best deal site to use? Groupon, Living Social, Amazon Local and what's been your successful strategy? Thanks so much! :)

Permalink Reply by Zenaida Fiducioso on October 25, 2015 at 4:13pm
Living Social is on a higher tier than Groupon. Amazon Local is one of the newer coupon companies that are getting popular. Like others have said in this discussion, you can negotiate your contract. The goal is to introduce your service and retain clients. How you do that depends on the area you live (demographic, location, spending, etcetera). A method of retaining customers for one business may not work well for other businesses. Be realistic, have thick skin, stay passionate about what you have to offer - believe in your product/service. You'll be successful if you are realistic about the income from a coupon company. Remember, these companies are also providing a service and have a tremendous database - this is what you're paying for. People forget this and expect to keep most of their overhead from these deals. You definitely don't want the loss but you're not rolling in the dough. This is SUPPLEMENTAL. If you've got three other businesses who provide the same service around you and you want to get noticed, this is a great way to go besides your local newspaper and coupon books. Word of mouth follows, because... you need people to do that kind of advertising for you. Happy customers - coupon people or not - will do that for you. Have an incentive for referrals too! The coupon customer who's happy will bring you more business. Now you've got more than one method of advertising going on.
Permalink Reply by Karen Winters on October 25, 2015 at 5:12pm

Great advice! Thank You!

Permalink Reply by Aundra on April 25, 2016 at 12:19pm

Hi,

You can definitely share your secrets with me.  I am thinking about Groupon for the summer months.  DM me if you can.  My email is also facesbymahoganie@gmail.com. 

 

Aundra

Permalink Reply by sandra topete on October 15, 2015 at 6:16pm
Oh girl, I feel you.... First of all, as a bussiness owner I will never have my employees deal with groupon clients, just because it's like having them work for free. It's just not fair.
Permalink Reply by Megan on October 15, 2015 at 7:09pm
I couldn't agree with everything you said more. When I had my own room I did an amazon local deal which is the same set up as a groupon. Most people didn't tip or tipped based off the discount price or less. It's do true about them waiting until it's about to expire to come in. This was a long time ago, about 4 years ago. I couldn't drum up enough business so I resorted to doing the deal and if I recall correctly I may have even lost money from the doing the deal. I am no longer in business :(
Permalink Reply by Zenaida Fiducioso on October 15, 2015 at 7:16pm
I'm really sorry it didn't work out for you Megan, hoping all the best for you.
Permalink Reply by leanne esparza on October 15, 2015 at 7:19pm

OMG this is the best topic ever!  I have said this my entire career of dealing with groupon.  Its a Love / Hate relationship.  SOOOOO many deal hoppers for sure.  and they pretend not to see the fine print or only come to see me once a year with a scary hairy mess for me to clean up and tip me 5 bucks if I am lucky.    

So this is what I have done:  I tell my clients.... you paid $29 to groupon for this brazilian.  But from now on if you come back and see on a regular basis..... with in a 6 week time frame.... I will only charge you $39.  But I make it clear with a brow raised and straight face that it must be on a regular basis.  And so far its working.  Its going to take some time to build this up to point of reaching my daily waxing goal... but here is the thing.  I am professional, clean, thourough etc. and   I am fast.  if they wanna go laying there intimate biz on everyones table in town... fine.  But guess what .... they are going to find the newby or the uneducated one that serves them a BAD experience.  And they will be back.  I remind them that they no longer need groupon.  If they like me and my service then my rates will be affordable.  But really I wish groupon was not so greedy.

Permalink Reply by Zenaida Fiducioso on October 15, 2015 at 7:22pm
Awesome incentive.
Permalink Reply by Janet Lynn Klein on October 20, 2015 at 1:17pm

I've learned to negotiate with Groupon!! ,,,say what?? Yes ... you the provider, business owner CAN dictate your terms. Don't let them tell you what your % will be.  Negotiate! They know it's tough out there now. I can't remember how many times I've threatened to Leave and never use Groupon again. :)

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