Recently, Groupon’s New York City website featured a $25 Hot Lavender Cream Manicure at Sweet Lily Natural Nail Spa for just $12. Groupon, which uses the idea of collective buying to generate a large number of sales in a short period of time, sent out the Groupon to its e-mail list and posted it online. When the day was over, Sweet Lily had sold 1,661 Groupons, far surpassing its 200-purchase minimum.
“When it got around 1,100, I started to get a little nervous,” admits spa owner Donna Perillo. She needn’t have worried. While lots of clients used it the first week, Groupon use has trickled down to about 10 a day, as clients have six months to redeem it. Perillo says they’ve rarely had to turn anyone away.
“It was less about making money, and mostly about experimenting with a new type of advertising,” says Perillo. After the deep discount and Groupon’s share, the salon broke even. However, she adds that more than 95% of buyers are new clients, and they get the names of everyone who purchased it. Groupon holders will come in with friends paying full price, add services, or make second appointments. In addition, they are generous with online reviews at sites such as Yelp and Citysearch.
The clients Perillo has seen so far aren’t the bargain hunters, necessarily, but more those who are looking to try something new. “Even if you just get a handful of people who become repeat customers, it’s a great advertising tool and a great word-of-mouth tool,” she says.
Salons interested in being featured can get more information at grouponworks.com. Because only one business is featured per city per day and Groupon spaces out similar companies to keep deals fresh and demand high, wait time can take anywhere from a few weeks to a few months.