I was interviewed today by a national salon magazine about the negative effects of Groupon.
Although I personally feel that “daily deal” sites are bad not only for the small businesses who run them, but for the economy and ultimately people who buy them, I know many will still succumb.
Which brings me to a moral dilemma.
Should I offer a “How to successfully use daily deal sites for your salon spa business”? …Even though I feel you shouldn’t use them at all?
“Who loves ya?”
-Christopher
P.S. Please comment below to help me decide.
{ 26 comments… read them below or add one }
Hi Chris,
Funny question!!! Should we teach kids how to steal so they can be entitled to get something for nothing if we don’t believe it is right????
Should we teach how to ‘not get caught’ or “oh it doesn’t matter, everyone does it anyway”.?????
What is best for the greater good not the instant pleasure???
Your conscience could be different then mine. You have to answer.
Blessings,
I will NOT do Groupon! Small business was asked to “take the hit” when the economy sank, so we did. After not recovering from the last blow, I’m realizing I’d rather have things slow down, take the time to per-fect more skills, than continue to “TAKE THE HIT!” Yet again…….. On these none tipping, one time visitors, that would stress everyone out to the max, because you NO they are not going to be happy, the clean up after them attitude to deal with. The complaints and bad reviews that would come after doing Groupon would another recovery.
If you have a lot of EXPERIENCED staff with nothing to do, and they would rather be busy, basically not getting paid for performing these services. (I’d make them vote on it, sign a contract) Then GO FOR IT! Groupon costs about $600.00, plus supplies, you will need to hire someone to be the gofer, and clean up person. (You’ll be too tired) I know what your thinking……… Up sale? Forget it they are broke!
A salon right around our corner did Groupon, at the time is daunting us. Because they’re parking lot was more full than ours. However, I ALWAYS check reviews! Guess what I read? After a couple of days everything was back to normal. All Groupon say’s is you’re slow!
I don’t use and will not use Groupon. I feel that as a massage therapist it would demean my work. By the time I was done, I would be doing my work for 1/4 of what I normally charge. I am worth a lot more than that. I also agree that most people using Groupon to get the deals will not be return customers.
I also will not do Groupon! Instead spend the money to reward your current clients for their continued patronage. Offer them a complimentary add on, or a nice discount. Provide a GWP, which everyone likes!
Unfortunately the other businesses welcoming Groupon will probably attract some of our clients, but in the end hopefully the exceptional experience wins. Have faith! We will survive if we do right by our client and sign up for every new promotion that comes along.
Happy Holidays everyone!!
Norma, I don’t think using groupon is like stealing, just an extremely risky (if not outright bad) business decision. I don’t think I should put my personal judgement onto someone else, and that I should help them no matter what (because there IS a “right way” and a “wrong way” to use daily deal sites).
…kinda like the politicians in Washington working together, even though they don’t agree.
I am so tired of our industry going into panic mode when the economy takes a hit. I’ve been in the industry for nearly 30 years and have been thru a number of recessions. Why discount your services. The landlord didn’t lower his price, the suppliers didn’t lower their price, the utilities didn’t lower their price, and the government surely didn’t lower our payroll taxes,property taxes, resale taxes, or income taxes, so why do clients assume they can bargan with us and why are our fellow salon owners caving in. I know a number of ” high end ” salons that have lowered their fees on everything from Blow Dries to Keratin Treatments. Not by a little, by a lot. Nearly 50%. I don’t even know how they keep their doors open. Enevitably I am asked why I haven’t lowered my price to that of my competition.
I think we need group therapy, as an industry, to have self worth and confidence. We need to build each other up and not tear each other down. Stop with the barganing, discounting, and slashing of prices.
I think the idea of Groupon and all the other “similiars” is just to get a customer into the store and then try to sell yourself, your services and your spa.
Groupns “take” I believe is around 50%, so no-one could profit. Maybe good for a retail item?
As I had been considering a similiar marketing team to upsell one of my new staff, I am very glad to receive all this feed back.
Cheers and a Merry Christmas and “good sales”!!
Amy Walmsley, Shibui Skin Care White Rock.
I am a solo practitioner and I used Living Social(same concept as Groupon) in September. My deal worked well for me but I don’t know how a business with employees or contractors could afford to do it. I think it would be helpful to have the information because everyones situation is so different and there can be so many variables in doing a deal. I will say that Groupon takes 50% and Living Social takes 40% of the deal price and that can be the difference in deciding to do a deal right there!
To answer your question, I would have to vote “NO”, do not offer a “how to” on daily deal sites. I agree with writer Michelle on the industry’s poor sense of self-worth, oftentimes being more led by what others are doing or promoting. Your “how to” may inadvertently send out a mixed signal that daily deal sites are a good option, and sooner or later, if we all stop giving them our business, it will die of natural causes.
I just signed on with Groupon to see if I could get new people through the door as I am an independent esthetician but my location doesn’t get a lot of walk by traffic. I was happy with the sales rep and how she explained everything and we did a small number (only 200) as a side deal to see how it worked out. I wasn’t too thrilled about the small amount of money I would be earning for the mani&pedi deal I put out (and working my butt off) but thought I might get a few new clients who would return if I gave them the good service I normally do on everybody. So far I HATE doing mani/pedis and this has only showed me how much I hate doing them. Oh well, only 115 more to go, thankfully they only sold 130! I thought m/p are the services that people want and there’s not a lot of overhead to lose but it’s a lot of work. I just wanted to be busier though the slow months (Jan, Feb, Mar) so we’ll see what happens! As long as they are rationed- I only allow 2 a day, I did 3 last Sat and I passed out when I got home. Ugh. My wine intake has definitely gone up since starting this, is that a plus?
Both Groupon and Livingsocial are good marketing stratgeries if your business model profit margin is designed to allow for this type of marketing. We get tons more new clientel from these marketing avenues then we ever get from print advertising. I look at the discounted income we receive strictly as an advertising expense but at least we get an initial up front payment and customers get to try a service they might never try without the discounted price. I would bet we get at least a 50% customer return for the service at the regular price. Most customers will usually tip for the service which helps offset the discount. The social marketing with these companies is valuable if your business can handle lots of new clientel for the alloted coupon redemption period. Everybody loves a bargin once in a while so saddle up and build your client base.
I wish I had read these reviews before I did a deal similar to Groupon. I lost several employees, spent a lot of money on product and got nothing for my trouble. I also discovered that people who buy “deal” coupons make poor clients. They are difficult to please, complain about the mandatory tip, and have no intention of upgrading or becoming a repeat client. In truth, this experience nearly shut my business down. The employees who stayed with me through it all celebrated the day the coupons expired. There are many good ways to attract new clients and Groupon and its cousins are not the answer!
We made the big mistake a year ago of using an out of state marketing company that sold $48 gift certificates for 4 “free” services. The marketers kept the $48, the clients received free services, the stylist/technicians received the mandatory 15% tip, and I paid the bill to supply product. Occasionally clients would upgrade, but most were looking for something free because they were broke and couldn’t afford to pay. Supplying the product for all the free services nearly put me out of business, several stylists were so irritated by all the demanding, free-loading clients that they quit, and now that the campaign is over, our salon is quieter and less busy than ever. I would not recommend Groupon or anything like it to any small business, and especially not for a business such as ours that has to supply product for free services. The only ones who win are the clients and the marketers. These programs only attract clients that are looking for a free deal and will never be faithful, repeat clients. My recommendation: Don’t encourage insanity!
“Don’t encourage insanity” …LOVE it!
B……..SELECTIVE……….CHRIS IS ON THE MONEY …..I PAYED $600..FOR A MODEST AD IN ABQ MAG..FOR MOTHERS DAY OFFERED A $25 ..AVEDA AROMA WITH GIFT CARD PURCHASE ……NOT ONE MENTION …..I HAVE A LAZER TEETH WHITING PERSON WHO DOSE QUITE WELL WITH LIVING SOCIAL……..I INTEND TO HAVE MY COMMISHION STAFF DO A MINIMUM WAGE CONTRACT FOR LIVING SOCIAL…….TO FILL IN THE GAPS …..IDLE HANDS ARE THE SATINS WORK SHOP ESP IN SALON FULL WOMEN…..MISS M
Groupon for the salon industry just doesnt work. They get a mani pedi for $25 and they wait till the next one pops up to take advantage of. It does not build the loyal customer and gets them in the door once because the “client” usually is not even in the same zip code as the salon. I’ve been promoting salons for 18 years and the feedback I get from people that have tried is that they are coupon clients. They come in for a good deal, dont tip and never seen again.
I will not ever do a “groupon” ever again. I did it once and it only attracts people looking for a cheap deal. As a professional massage therapist, it cheapens my work and the whole spa industry. There is a negative connotation no matter how hard I have tried to give the best service because I knew I was not getting paid what I am worth. How come doctors, and nurses aren’t offering this? Like the above comment, us service workers don’t get discounts on taxes, mortgages, rent, and utilities just because times are tough. Plus when I did do a “groupon”, my tips were around $5 at best. I normally receive anywhere from $15-$30 tip per service. This is another blow to the massage industry. The first one are the massage “parlors” that are prostitution dens. I will say this, on a positive note (because I always attempt to see the brighter side of things) it has brought some new clients to me that said they tried those deals and were disappointed and therefore became more grateful for all that I have to offer as a therapist. Also, I understand some people just can’t fit massage therapy into their budget. I am not saying it should be illegal or anything, I just don’t think it is right for the spa industry, or any type of service work (restaurants).
If you don’t want “hit and run” customers. You should try Trubates, their ads run for a month, not just one day. they only take 15% of the total deal. Try a price point closer to $99, that way you don’t get the cheapskates, offer a good deal without giving away the store. If you have a way to track it, offer multiple services to be used over 30 days, (only let them use 1-2 services per visit, etc) that way you will only get people in your 3-5 mile radius. Trubates doesn’t push you to offer a $20 deal. You won’t get hundreds of new customers, but who wouldn’t like 5-10 new people each month?
As an owner of a few businesses (and friends with several business owners) I know that the prevalent misconception is that advertising via group deal sites is equal to you giving away free services/products to people. It is not you giving away free services/products. It’s advertising at its best. Think of the funds you set aside each month to advertise online, print, radio, television, etc. How many viewers actually convert to customers? How many of those are NEW customers? Technology and online buying trends have allowed group deal sites to improve how businesses target and acquire new customers. In addition, you don’t pay for them until they buy a voucher. A well-designed voucher in conjunction with a solid retention plan (which every business should already have) will produce income for your business, bring new customers, then bring them back again. Having spent $1200/week on print advertising with ok results, I’ll use group deal sites again and again because I’m paying for a customer.
I have to disagree regarding Groupon, I believe it heavily depends on how the merchant uses the deal. If you have people come in, use your service and leave, then yes, it is a waste of your time.
I am the marketing person for a medical spa. We have run multiple deals with Groupon and it truly has grown the business. Yes, some of the clients are just deal seekers, but we have also had some very high quality people walk through the door who are now valued patients. One in particular came in for B-12 injections, probably the cheapest service we offer, and to date has spent over $5000 in our spa between Botox, fillers, cellulite treatments etc.
If you offer good customer service and a good product, and know how to sell without being salesy, that is all you need. Talk up your other services while they are there, and use the contact information you get from them for additional marketing campaigns (e-mail, text etc). Just get them through the door, and the rest will follow.
Yes, medspa’s have a slight advantage because they offer much higher dollar services and know how to sell
I am in the middle of doing a groupon and living social ad. It is the most stressful thing I have ever done and I feel like it is hurting my business (because the negative people are the only ones that answer the surveys) and you know that saying “one bad apple don’t spoil the whole bunch>” WELL it certainly does do damage.
My staff is going nuts with the clean up and I am floundering because of having to purchase so much supply. I WILL NOT be doing this again. you guys are right. better to be slow, build and perfect skills than to take such a financial hit and negative blow from clients that will most likely NOT come back.
There are much better ways to get people in without giving away 75% of your service. Groupons days are numbered…
I have read the coments and i would agree. As a small salon owner, i tried Groupon when it was slow in January. It brought in the wrong demographic most were just deal hoping all over the internet, we did a cut. Turns out most had bought other coupons from other salons for color so it was very difficult to upsell. Most did not return, that didnt seam to be the intent, it was to. keep buying deals. Had issuses with, “new clients only” clause, older clients expressed that was not fair, and i had lost a few of my clients. The other issue was paying the hairdresser their commissions, they felt like they were working for free. After what
Groupon pays, and what you need to pay your staff. Not worth the entilted attitude they give you, as 2 with expired coupons threatened me if i didnt except it, they would trash me on Yelp,…wrong demographic …
I am a very slow learner. LOL. I did three in a row. What a major mistake. First one.. Not too bad.. Second was a real success! But the third I did for my very slow at the time (renters) was horrible!! It attracted the wrong people.. they complained they couldn’t get in soon enough, they waited to the last minute to book, my renters complained about the people.. It just was a major headache and I lost alot of money. My income report proofs it
Now I do my own brand of marketing to my clients and my new clients. Adding more value for the service and not discounting. I do offer a $10 off your first facial on my website if they join my mailing list. and also I offer a active referral program.. Never again with the groupon..Live and Learn. Sharon Williams – Pristine Clinical Skin Care, CA
My Salon owner runs Groupon and Living Social ads constantly. Any time we bring in a new staff member or if things are looking a little slow. I have had to sit down with him and explain to him that the money that the salon brings in after paying commission (to the site and the stylist) does not even pay for the product that is used. Which means that it also doesn’t pay for the gas, electricity, water, and rent. Basically, as a salon owner, he is paying to have these people come into his salon.
As a stylist, as well, who has been working behind the chair for over a decade, I feel that it devalues the tremendous amounts of education, for which I have paid a lot of money, over the years. When I have a title on my card, that denotes my education and experience, and am giving away my services for pennies on the dollar, it just looks bad.
It is a great way to get people in the door, sure (we had 147 new clients in December 2012 through the doors and 82% were from daily deal sites)… but we have seen very few returns. Even people who pre-book don’t always come back. Let’s face it folks. They are bargain shoppers and transients. A good stylist understands that you can never COUNT on transients to pay your bills, despite how much they loved their service.