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There are two different discussions going on right now on the ABMP and Massage Mag LinkedIn groups regarding Groupon. If you don’t know what Groupon is, check it out at www.groupon.com.

I’m not here to advocate the use of Groupon or steer you away from it.  I just know that services like this are being used by therapist with varying results. Therefore, I felt it important to open up the discussion so we can all learn more about this promotional concept from those that have used it.

Allow me to weigh in first with some input based on my observations of some of the experiences our clients and prospective clients are having:

A)     “My phone is ringing off the hook!” (This is what we are hearing from prospective clients calling looking for a solution to deal with their crazy call volume).

It seems that the response you can get from running a Groupon promotion can be very high (200 to 1200 Groupons sold in a day). Which means: That once your Groupon (coupon) is posted you can expect a flood of calls coming in. Not being prepared to absorb the increased call volume can create a problem.

B)      “All I am doing is discounted appointments!”

The other issue that I see happening is if you do not limit the times when someone can us their Groupon, you can end up giving $18 one hour massage (a $60 massage offered at $30 and then the 40% Groupon fee taken out) until  you fade off into the sunset.

Offering the ability to allow clients to schedule online and then having the criteria that all Groupons must be scheduled by the client online, can resolve ‘A’. Limiting their ability to only schedule on certain times on certain days can resolve ‘B’. We have a client that only allows two appointments per shift for 9 out of his 16 therapists to be scheduled with a Groupon. The calendars for these 9 therapists have Groupon appointments booked almost to the end of the year.

That's all I know. So please share your Groupon experience if you have one. Hopefully the folks on LinkedIn that have shared their experiences there will jump in here.

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I think the broader discussion is about mass discounting and its implications.

SpaWeek creates a similar issue.

The goal is not throughput, the goal is repeat clientele and profitability.

I have yet to see any data to suggest that these promotions build either short term or long term profitability.
I agree that a broader discussion needs to take place regarding mass discounting.

I had actually had additional commentary at the end of my post (before I posted it) to spark that debate. I left it off thinking that the concept of mass discounting within the industry is a whole separate discussion.

Also, no matter what, individual practice owners have and will offer discounts. With that said, I felt it important to open a specific discussion regarding Groupon. I’m hearing too many cases where practice owner have failed to plan ahead and are now stuck dealing with the mess they created by offering a Groupon. Hopefuly this discussion will offer some best practice ideas for those that choose to go down this path.

I will start a new discussion to debate ‘mass discounting and its implications’.
This is awesome feedback!

So there you go. A sole practitioner is just trying to generate some volume and buzz with a Groupon. Then (because they are not in a position to deal with the overwhelming response) they get scorched on a site like Yelp.

Plan a head folks before you pull the trigger on doing a Groupon. You have to be prepared to respond to the immediate tsunami of appointment requests that a Groupon can create, and then be able to deliver the goods.

I know you can set the minimum number of Groupons that need to be sold before the ‘deal is on’. Can you also set a cap for the total number sold?
I did a groupon voucher as a solo practitioner. Last November, I sold 200 vouchers for a half-price hour massage session. I received my cut and groupon took their cut, and I had lots of massages to do by May 6th of this year.

The first thing I did was limit the hours that I accepted clients - eliminated evening and weekend appointments for them so I could continue to see my existing clients.

Next thing I did was to offer a small discount on their next massage if they booked one right then at the end of their session. This helped me convert many, many of these clients to become regulars.

Finally, the voucher expired, and I have been booking some of the expired voucher clients using the voucher as a discount coupon instead of for a whole massage - one of them booked a two-hour session with me recently and paid the difference - which means I made money off of that voucher. Others are doing the same thing. Almost 30 percent of the vouchers expired, so that's cash in my pocket for no work. Granted they will have to be honored as coupons if they decide to book a session, but that means that I make almost all of the money I would have made on a massage session.

The key to doing a successful voucher with groupon, though, is knowing how many massages you think you can safely and comfortably add to your book in the time period.

Of the vouchers I did in the active period of the voucher, I rebooked 20 percent of the clients - that's a fantastic return on my investment, and I look forward to these new clients for a good long time to go.

I would totally do a groupon voucher again.
Yes, you can limit the number of vouchers sold.

But here's a typical pattern for response from customers who purchase the vouchers based on my experiences and from asking the clients who came in and redeemed:

You'll be busy immediately from people right away for a few weeks, then you'll experience a decrease in redemptions until the expiration date nears, when things will pick up again. Groupon sends out an email to the vouchers purchasers one month before the expiration date, so expect to be very busy for the final month of the voucher's period.

I did repeat my linkedin comments here in this thread, so you can read them, too.

Norm Green said:
This is awesome feedback!
So there you go. A sole practitioner is just trying to generate some volume and buzz with a Groupon. Then (because they are not in a position to deal with the overwhelming response) they get scorched on a site like Yelp.
Plan a head folks before you pull the trigger on doing a Groupon. You have to be prepared to respond to the immediate tsunami of appointment requests that a Groupon can create, and then be able to deliver the goods.

I know you can set the minimum number of Groupons that need to be sold before the ‘deal is on’. Can you also set a cap for the total number sold?
Thanks Paul. I was hoping you'd jump in.

In every post there are a few details emerging on what is involved when doing a Groupon. Can someone that has done one present the process from start to finish?

Details on things like: Once you decide to do a Groupon ... What happens next? Once someone buys your Groupon ... What do they 'get'? What do you as the entity offering one get when a Groupon is sold (are you notified of each sale or do you get a comprehensive report after the deal is done)?

The detail that Groupon sends out an e-mail to the vouchers purchasers one month before the expiration date, is important to know. When that e-mail goes out your call volume is going to spike.
The reason why it worked for me isn't because I'm a workhorse who can do a lot of massage - because I limit my work to four hours of bodywork a day (five on occasion), but because I took a hard look at how many massages I thought I could comfortably add to my schedule.

The other important thing is that I limited the number of vouchers sold to 200. In the six months, that equals out to adding 33 massages a month, or around 8 massages per week. That's just an average though, and not how it actually works out in the real world.

What really happened is that almost 60 of the vouchers weren't redeemed in the active period...So, that takes us down to a greatly reduced number of massages - I got paid for no work. If a person wants to redeem their voucher now that it's expired, they have to pay the additional money to make the difference. A few people have done that so far, and I expect that there will be a trickle of these still.

I have rebooked around twenty percent of the clients that came in for a groupon massage, so to me that's a pretty good investment, although I'll look at the numbers and figure out exactly what my ROI was before I pronounce anything as a success or not just yet.


Ezekiel OBrien said:
As a massage therapist in the San Francisco Bay Area and a regular purchaser of Groupon's for stuff like bay cruises and restaurants I am on the Groupon mailing list and follow their discussion boards. Out here when a massage or spa service gets posted a lot of buyers jump. I imagine it could be good for a spa with capacity but I have seen sole practitioners get a lot of bad exposure on groupon and other review sites such as yelp! either because they could not keep up with demand or they had to keep on booking out too far advance for the clients. In San Francisco is not uncommon for hundreds or thousands of Groupon's to sell in one day. Once you sell them you get about 50 percent of the value of the discounted price and then you and your good name is on the hook for the duration of the coupon. That is a lot of massages for a sole practitioner to juggle with the client he or she already has while striving to maintain quality work. One bay area therapist has a discussion on linkedin as to how it works for him but he also has posted about on other threads about his ability to do a lot of massages. So yes if you are a workhorse who can do 6 plus massages it might work or are in a smaller market it could work too but I personally would be worried about too much of a good thing while creating a Groupon in a big market.
I can say that I have had good success in rebooking groupon voucher clients, either right at the time of the session, or later on with follow-up calls, or they just booked themselves with no prompting. I believe that the long term will be a net positive for me and my practice.

Relax & Rejuvenate said:
I think the broader discussion is about mass discounting and its implications.

SpaWeek creates a similar issue.

The goal is not throughput, the goal is repeat clientele and profitability.

I have yet to see any data to suggest that these promotions build either short term or long term profitability.
OK, here's how the process went:

In October, I was looking at ways of boosting my clients - last year was difficult, as I'm sure many of you can attest - and a hair-burner friend of mine suggested Groupon, as his salon had done one and had had good results with it. I contacted Groupon and gave them a proposal. The Groupon person assigned to San Francisco contacted me and we discussed what would be a good deal for me. I asked about conversion rates and no-show rates, and she didn't know, but did let me know that around 10 percent of a local gym's voucher clients had purchased memberships.

Groupon doesn't, or didn't, keep track of redemptions. They are building webpages that will let businesses report on redemptions, but that doesn't yet exist. So any data has to come from your own tracking.

Once we had an agreement in place, it was three weeks before my deal actually ran.

Once the deal was done being sold, I could go on the Groupon website and download a file that listed the names and groupon voucher numbers of the purchases - no contact information, though. This was a problem for me, because I would have liked to have been able to communicate with these potential clients about how to redeem in a way that would have made the vouchers redeemed in a more even and orderly fashion. But Groupon's stance is that the effectiveness of their communications would be diluted if the businesses could do so...

Once the redemptions started, though, my regular clients started complaining about not being able to book evening and weekend appointments, so I immediately changed my online scheduling so that Groupon vouchers would be only able to redeem during "business" hours - for me, that meant noon to 6pm Monday through Friday. This left my high-value time slots, evenings and Saturdays, open to my full retail-cost clients.

I had no problem with making groupon clients reschedule if I had too many bookings for a single day - I would either telephone them and reschedule with them that way, or would cancel the appointment online, explaining that I was unavailable at that time slot and they could either call me or just pick another time slot online. No one complained about this practice, and it seemed to work out well - I got to keep my normal practice of limiting the hours of bodywork I did, and I got to communicate with clients so they could get a feel for me and my practice and professionalism. I would always explain that I wanted to be able to provide them with the highest level of service and that by movig them to another timeslot, I would be able to. People appreciated this.

During the sessions, I would do my intake work, then explain their options to them - they could either get a session of overall relaxation work, or more focus (neck and shoulders, back, legs, hands and arms, etc). Most of these people took the session focus on neck and shoulders, so I got to really fine-tune my protocol for doing that detailed work. As my yelp reviews show, people really appreciated this.

At the end of the session, I'd dynamically offer them $10 off their next session if they booked right then. This discount would be dependent on whether they had already expressed a desire for regular bodywork or if they were a bargain hunter, or other factors. When I offered the discount, they were much more likely to jump at the re-book. If they were looking for a regular therapist and had used Groupon as a way of auditioning, they often re-booked, too.

Marketing my services is something that I feel very confident in doing - I can talk to anyone and anytime about what I do, what its benefits are for their specific situation, and then either book with them right then or get their contact info to contact them later about booking. All it takes is practice, practice, practice. Soon, it becomes second nature to do, and people often appreciate that you are taking time out to talk to them about their pains and stresses. This, is one of the keys to successful marketing - people want to be heard, to be appreciated. They also want to know what's in it for them, so being able to do both of these things is like owning a gold mine.

At the end of the voucher period, I put up a blog entry on my website http://paulbrown.net/ that explained that the voucher has expired and how they can still use the voucher as a $40 gift certificate to apply toward my services. The other thing I did, though, is I stopped offering a 30-minute massage session via my online scheduling system. I charge $40 for 30 minutes, and I want to maximize my profit. So, if they want to use their certificate, they have to pay the difference. I can still book 30 minute session on my scheduling system, but the public cannot, so I can limit who I allow to book these shorter sessions.

Norm Green said:
Thanks Paul. I was hoping you'd jump in.
In every post there are a few details emerging on what is involved when doing a Groupon. Can someone that has done one present the process from start to finish?
Details on things like: Once you decide to do a Groupon ... What happens next? Once someone buys your Groupon ... What do they 'get'? What do you as the entity offering one get when a Groupon is sold (are you notified of each sale or do you get a comprehensive report after the deal is done)?

The detail that Groupon sends out an e-mail to the vouchers purchasers one month before the expiration date, is important to know. When that e-mail goes out your call volume is going to spike.
That pretty much provided the detail I was looking for. Thanks Paul!

Paul - What was your original Groupon offer?
What percent did you have to pay Groupon?
Do you have any plans of doing it again?
What would you have done differently?

Does anybody else have a Groupon story to share? Good or bad?
The original offer was a 60-minute massage voucher for $40, which is half my normal price.

I am talking to another deal-a-day site about doing an offer, but the salesperson seems flaky, so I might not work with them. I would do another Groupon, and possibly make a different offer, like a couples massage package, or a hot stone session, or something else.

Norm Green said:
That pretty much provided the detail I was looking for. Thanks Paul!

Paul - What was your original Groupon offer?
What percent did you have to pay Groupon?
Do you have any plans of doing it again?
What would you have done differently?

Does anybody else have a Groupon story to share? Good or bad?
Thanks!

Ezekiel OBrien said:
Great feedback thanks Paul. Your posts are always interesting.

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