Q&A

I’m thinking of offering a service deal on Groupon or a similar group deal site and I’m wondering what I should know in advance.

Q.

I’m thinking of offering a service deal on Groupon or a similar group deal site and I’m wondering what I should know in advance. Are there any downsides? Can I expect to get repeat business from it? 

A.

Day spas and salons are particularly good candidates for Groupon and other collective buying sites because they directly target the audience most salons and spas want to reach — college-educated, single females who go out at least twice per week, who are social-media savvy, and actively spread the word via other social networking sites about your business and offerings.

Before you offer a deal with one of these collective buying sites, you should set clear goals for what you want to accomplish and put a plan in place for the initial influx of customers. And you should keep the following things in mind:

> Be specific. When creating your deal, be specific about what you are offering. Don’t give a percentage off across the board, but make sure that you design a deal that you will truly be able to sell and benefit from long term. Make sure it is relevant to the time of year and that there is a demand for the service you are offering.

> Make your business buzzworthy. Sometimes just because you want to do a deal does not mean you will be accepted. These sites look for businesses that already have some buzz surrounding them (i.e., news articles, PR, advertising, Citysearch profiles, Facebook fan pages, and Twitter feeds). They want the deal to be just as much of a success as you because the more people who purchase the coupon, the more money they make. If no one knows about your business through your own promotional efforts, then your deal may not fare as well.  Make sure you have these things in place before you go to one of these sites searching to do a deal.

> Money. Although it is a “free” service to you, the real deal is this: You must offer at least a 50% coupon to qualify. Then, depending on the company you use, they will take a 30%-50% commission on the deal before sending you a check, which is usually within one to three weeks. Essentially you make about 25% of the total deal in a lump sum.

On the positive side, it’s a chance to reach new, potential clients who ordinarily would not be affordable through traditional advertising. Additionally, when customers visit to redeem their coupons, it’s a great opportunity to up-sell services and sell retail products.

Also, if you keep accurate records of all the new people coming through your doors, it will present an opportunity to offer them something extra to get them back. It’s what you do after you get them through your door that determines the long-term success you will have as a result of using this service.

 

— Tiffani Douglas is a nail tech and the author of Social Media Marketing: A Guide For Beauty Professionals (www.tiffanis-beautyparlor.com

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