Marketing & Promotions

Should You Be a Groupon Groupie?

Daily deal sites like Groupon, LivingSocial, and countless others allure nail salons to advertise by their amazing reach and lightning-fast response times, but are they worth the pain in the you know what?    

Best Practices

Think a daily-deal site coupon might be for you? Here are a few ways to achieve the best experience and minimize your financial losses:

Instead of discounting one specific service, run a voucher at a set price. For instance, the purchaser might pay $15 to get $30 worth of salon bucks. That way, if your typical pedicure is $40, she’ll be inclined to pay the extra $10 out of pocket. Plus, there’s no confusion over what service is covered or not. The client will still be happy she’s getting  a deal, but the final price she actually paid will be closer to the true menu price of the service.

Pick a service to discount that already has a high profit margin. This may be a foot massage or a paraffin dip. Trendy or exclusive services (Shellac and Minx come to mind) are also a good choice because it increases the likelihood that you’ll retain the client.

Limit how many people can purchase the deal. That may mean you’ll lose some potential new clients who didn’t act quickly enough, but it’s better than overbooking and rushing new (or worse, existing) clients out of your chair to get to the next client. Also, if your goal is to get new clients, then make sure the coupon specifies it’s “for new clients only.”

Since daily deals work best for nail techs who have mostly empty books, offer the daily deal as only for your newest nail tech. That way she gets introduced to the community and doesn’t have wasted hours at the salon waiting for walk-ins.

Be prepared to offer a top-notch experience. “Some merchants will need to consider bringing in additional staff once the deal is eligible for redemption and for the months that follow,” says Maire Griffin, director of communication for LivingSocial.  “LivingSocial brings them in, but the experience they have with you means the difference between  a walk-in and a lifelong client.”

PROS & CONS

Pros:
> There are no upfront out-of-pocket costs. Unlike buying a newspaper or radio ad, you don’t have to front any money to get new clients in your doors.
> Smile for your business’ 15 minutes of fame. The e-mailed coupon will go to a huge database of subscribers, plus those subscribers may forward your deal to their friends.
> It’s immediate. The deal is usually available for only 24 hours, creating an intense sense of urgency in potential clients. (Most customers will redeem it the first 30 days or the last 30 days, according to Groupon.)
> You’ll likely get an influx of cash quickly, which could be key for completing a project, such as for a repair or remodel.
> You’ll not only be the talk of the town among potential clients but people in all career paths, including journalists, subscribe to daily deal e-mails, so the extra exposure could lead to even more exposure via other outlets in the future.

Cons:
> As bargain hunters, many of the new clients will be more demanding than typical customers and will try to get the best bang for their buck, which can include demanding more freebies once they’re in the chair. They may tip on the reduced price. Also, you may not be able to retain these clients at full price, as they may jump to the next daily deal.
> The entire process of coming up with a discount that’s steep enough and on a popular enough service that’s acceptable to the site, then waiting for the ad to run (sometimes with little warning of the specific date on which it will run), then answering phone calls from purchasers, can be stressful.
> You may well be taking a loss on each daily deal service that you perform, causing your salon to lose, not make, money, at least in the short-term.
> You may not be able to fit everyone in, forcing you to extend the coupon’s time period or turn clients away. Loyal clients may get frustrated or even switch salons because they’re fed up with the wait times.

Have you had an experience (positive or negative) with a daily deal site? E-mail your experience or advice to sree.roy [at] bobit.com.


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Keywords:   advertising/promotions     consumer advertising     customer service     marketing/promotions     web marketing  



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