Marketing / Professionals

Are Groupon and other deal sites good for your spa or massage business?

 

Should you run a “Groupon”? Don’t stress over it.

When Groupon hit the Internet a few years back with its cut rate deals and large commissions, many businesses did not know what to make of it. Some jumped on the band wagon right away, offering super deals that brought in lots of clients – sometimes too many. We have all seen the stories of the day spa or other business that sold 1,000 or more massages or other services only to realize that they could not possibly fulfill the demand. Customers screamed and placed negative reviews all over the Internet, and the business suffered immensely.

Other businesses waited and passed up the quick inflow of low or no profit clients. Why give a service away for cost, or less, for clients that are deal hounds? Surely these customers are always looking for the lowest price and will go from deal to deal, from spa to spa, from massage therapist to massage therapist, whenever they can find a new deal with a super low price.

To this day, many day spas, massage clinics and other businesses still have not run “a Groupon” and prefer to stick with traditional marketing techniques. Many others have given a deal site a try but have had bad experiences.

Using a deal site improperly can ruin your business. You can easily be overwhelmed with clients that will never come back and pay your regular prices while your full paying clients can’t get appointments. If you underpay your massage therapists they will be dissatisfied, lower the moral of your staff.

However, if you learn to use these deals properly they can become an important part of your business, and help to increase your overall revenues.

First, only offer deals to new clients. Unlike a restaurant, day spas and massage therapy clinics know the name of each client they service.  You can solicit your past clients directly – it is not necessary to have Groupon do it for you.

Next, make sure the price you are offering is comparable to the price the client can get if she comes back to see you. For example, if you offer massages to regular clients for $59, don’t sell a Groupon for $19. Use a price closer to the price the client will pay next time, maybe $39 or $49 in this case. You will sell less deals but get better clients in return.

Pay your therapists appropriately. If you need to drastically cut your therapists pay to offer a Groupon you may want to reconsider. The business should absorb the bulk of the decreased revenues, not the therapists. After all, when you advertise elsewhere you don’t take an advertising cut out of the therapists pay. Groupons are a form of advertising.

Put reasonable limits on the number you sell. Start out conservatively and increase the limit on the next run if it works out.

Lastly, treat all of your deal clients the same as a non-deal client. Don’t every make a deal client feel like a second rate citizen!

Check back next week for an article comparing my personal experience with Groupon, Travelzoo, Live Deal (Amazon and Google), and Living Social.

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