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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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The site automatically blocks some words on a watchlist that are considered to be derogatory in nature. "Chink" has had some negative connotations in the past, but in your post it's obvious as to your intended use. I removed it from the list so it won't show as asterisks anymore.

 

Best,

Abram Herman

Site Moderator at massageprofessionals.com

Relax & Rejuvenate said:

I did not post any asterisks -- the word I typed was CHINK....but I think I am a victim of the PC police which edited my word for me.

 

I agree, groupon-alike sites are bad in my opinion.

The text messaging is not only for current customers, it attracts new customers because new people will be interested in subscribing to get specials. That's a good way to attract new customers. The problem with text messaging is that you still have to do the advertising for this text message campaign. 

Your yield management method sounds really good to me, as long as it has great exposure, the same as groupon or massage envy do. What is the name of that company again? is it expanding? when is going to be covering South Florida?


Relax & Rejuvenate said:

I did not post any asterisks -- the word I typed was CHINK....but I think I am a victim of the PC police which edited my word for me.

 

Reminds me of when Newspapers went PC and changed their spell checks. Lots of business stories had some embarassing substitutions, especially when focusing on improved business results. Several stories at the Philly Inquirer stated how the business was "back in the African American". Boy, were they Native American Faced over that!

But anyhow...

 

Text messaging your own deal for yield management is one method, but it only reaches current customers.

The main alleged value of the deal sites is in bringing in new customers.

 

i think deal sites ARE inherently bad for several reasons -- and not just in our industry

#1 -- the economics are poor for the merchant, especially if they are not a sole practitioner, Downright money losers in most cases.

#2 -- send a bad message to the buying public. Too many are too accustomed to jumpin from one deal to the other and works against customer loyalty (sure, they loved your massage, but not at that price). There are plenty of discount massage places and facial too. If you can't afford it, go somewhere you can afford.

#3  - customer acquisition costs turn out to be very high, when you figure the % of people that actually repeat vs. the number of services you did not have to lose money or on discount so highly (same problem with SpaWeek -- your regulars rush in to get the $50 treatments and skip the full price service they would have done +/- the 7 days around Spa Week)

 

#4 - Not many are interested in their merchant partners. The deal site makes money on all the deals, even if the merchant does not. They are not partners, they are parasites, willing to kill their host and move on to the next.  Merchants can exists without deal sites, but deal sites CAN'T exist without merchants. ABout time they started acting like it.

Recently all i have had is groupon clients . Its utterly frustrating doing one hour massages for 8$ or 90 mins for 12$. im my expeirence they are only out for a discounted massage and hardly ever become regular . i feel as if im being taken advatage of , its a slap in the face .  

Sorry you are having a bad experience, but only you can let yourself be taken advantage of by signing up for such a program.

GROUPON does seem to have gotten the message from disgruntled merchants. They are now only taking a 25% -- or sometimes a little less -- on the deal amount, which allows us to make money, so we gave it a try with them.

The experience has been surprisingly positive. Clients AREN'T picking the most expensive treatment on the menu because if offers them the greatest savings (as we saw with Travelzoo customers) and several have purchased products.

groupon also pays very quickly and only 1/3 of the sales have been redeemed nearly a month into it.

I am still not a big fan, but it helps cover some fixed employee costs so I am paying them to do massages instead of paying them to do nothing.

Hi Kathryn...I know you posted this in November..and at that time I was working at a Salon that just started Groupons...well now its April and they are still doing $41.00 60 minute Massage...I have to split the salon cost of $21.00 with the owner - which leaves me $10.50/massage....clients "love the massage"...but they do not come back!  $70 massages for $10.50!  People just don't realize (nor does the  owner of the salon) what actually a massage therapist does and what the real benefits are...I am very FRUSTRATED!!



kathryn marie littlejohn said:

Recently all i have had is groupon clients . Its utterly frustrating doing one hour massages for 8$ or 90 mins for 12$. im my expeirence they are only out for a discounted massage and hardly ever become regular . i feel as if im being taken advatage of , its a slap in the face .  

I have experience with buying and selling Groupons.  Our mini day spa sold 1000 coupons and we were swamped for almost a year, right up until the expiration date.  We were meticulous about managing the influx of new business and managing our regular clients so that both groups received a high level of service.  This is one of the main complaints with small businesses selling a Groupon.  They get overwhelmed with volume and their customer service severely suffers.  Then ruthless new customers start leaving bad Yelp reviews or other internet reviews and it ultimately hurts the business.  I collected a handful of regular clients from our Groupon experience.  While our experience was somewhat positive, we would never sell another one.

Recently, I decided to purchase a massage Groupon from another small day spa.  I knew it would probably be difficult to make an appointment and indeed it was.  But my expectations were managed from my previous experiences so it wasn't upsetting to me.  I simply waited until I heard back (it took leaving a few voicemails over the course of a couple weeks), made my appointment and had my massage.  It turned out to be one of the best massages I've had and now I'm a regular client of that massage therapist. 

I know of another small day spa that releases 50 coupons every quarter so that the business gets a boost but is completely manageable.  It seems to work well for them. 

there are so many ways to handle these daily deals- as long as you are strategic in what it is and how you position your offer,  it is thought out in advance and planned for, there should be only an 'up-side' where you make some money, get new clients, and turn them in to 'regulars' who want to come back and see you!

I advise businesses to look at it as an opportunity to promote your business where you are only asked to pay AFTER you make the sale. (Remember, traditional advertizing costs you money no mater if you don't even sell one service!)

And bottom line, those deal companies need us way more than we need them, so be ruthless in your negotiating!

I find these 'deals' to be the result of the "Wal Mart Effect" and insulting. Everybody wants a (better) deal and even the $39.95 introductory price (at a franchise) is too expensive -- people want an even lower price.

 

Example, I spoke with an independent day spa owner who had a 60-minute massage booked and then was asked to "price match" a $20 60-minute "customized" massage from another outfit. Since the day spa owner informed the client that she was a day spa not a corporate massage franchise, the client cancelled her appointment because she couldn't get the $20 price match... and this was a repeat client. 

 

As professionals, we collectively have to take a stand against this trend, it seems, or our whole industry is going to suffer.

 

This is happening out there... the new normal...???

It's a shame people still using groupon and undervaluing their work with groupon.

If my massage career was sick, Groupon was Dr. Kevorkian with a lethal injection and a coffin.  Groupon and Massage Envy types of businesses are a Cancer to massage therapists being fairly paid, and the quality of this industry.  You can't give it away now, and expect someone to pay full price later.

Let me explain, I had my own biz for many years, then relocated to a different city.  For various reasons I chose to work for someone else.  Groupon takes off in our fine city...and YES the phone rings...a LOT.

Groupon gives the buyer a 50% discount, then Groupon takes a cut, which leaves the biz with very little.  They have to keep the lights on, so by the time the therapist gets paid...OMG, if someone ever told me I'd work that cheap years ago, I'd have told them they were outta their mind.  If a groupon client did not tip, and often they didn't, by the time I averaged out my total time; preparing, intake, massage and clean up, I found I was averaging less than minimum wage.  OUCH.  As and independent contractor, I ate the difference.   I also cried when I got my paycheck.  And paid for gas in my car with change I scrounged up.

Groupon clients are looking for a deal...maybe 3% come back as regulars, but for the most part they are 'spa hoppers' who go to the next deal, the next Groupon or someone else's cheap massage.  If you want a long term business, solid clients and income, this is not the way to go.  These are the cheapskates.  No thanks.

So why didnt' I work somewhere else?  Try to find a place hiring that isn't running a Groupon!  I answered various help wanted ads only to find that they all were running Groupons.  Yikes.  Not to mention it undercuts the value of the service across the board...why should I pay this person $70, when I can get a Groupon for $30, or go to Massage Envy for $39?  Anyone who wants to put both gas in their car and buy groceries can't do it as a full time massage therapist anymore!  I used to make a decent living.  Now I go to school and wait tables, after 14 years as an MT.

My former employer got too used to the HUGE check Groupon was sending her at the beginning of the promo, and ran Groupon, after Groupon, after Groupon.  I just couldnt' take it.  I left the industry, very bitter. 

I would also add, as another person stated Groupons kept them busy for over a year...for the few clients who wanted to come back in and pay full price...very hard to book them, because Groupons had us booked up VERY far in advance...but for the 'discount today if you rebook" the trend was that even those who came back didn't end up paying full price...they kept coming back at discounted prices...I was shocked if we had a full price client, maybe I had 3 in the year + that I worked there.

I have mixed feelings about my Groupon coupon.  I keep considering running another deal to have a full schedule, but my schedule is already pretty full and I don't want to book up times with clients coming in for Groupon deals and not be able to get one of my regulars in.  My results doing a Groupon turned out pretty good.  When I look at what my revenue was per client when accounting for tips, I ended up getting close to what I would for my own promotional rate for new clients.  But I was smart about my offering.  I boosted the value by creating an add on worth $50 (I get another 25% of $50) without adding much cost or extra time spent.  I said "here is a relaxation enhancement worth $50) and it includes a foot scrub, hot towel, aromatherapy, etc.  Some clients loved it so much they requested those extras and then I was able to rebook them at a higher cost, but instead of charging $50 for that add on I charged just $10.  Then they feel like they are still getting a good deal even though they are paying my full prices now.

I also was lucky to get a few clients who referred all of their friends to me.

This gave me a pretty big boost to my client base short term and I have seen some fairly decent long term effects even 1 year after I finished my Groupon.  Referrals are great!  I also built my own email list from all those Groupon customers so I can send out occasional deals to them when I am slow and want to fill in some spots on my schedule.  I figure $50 per hour is better than nothing.

Groupons do attract a lot of one timers and those looking for an occasional "cheap" massage or "good deal."  You will have those people so expect it.  What you have to figure on though is that if you do a fantastic job and get just a few who become regulars out of the 50 or 100 Groupons you do, you ARE building up your practice and heading in the right direction.  What most of us have is not enough clients.  Otherwise we wouldn't do any marketing.  I think Groupons can be successful but you have to be smart and limit your vouchers sold and boost the value of the service offered by creating some add ons that are low cost to you and don't require added time or work to the service being offered.

I probably would do another Groupon if I wanted to boost my clientel, but like I said I am now getting plenty of new people and staying pretty busy without Groupon.  It is a good way to get a boost in your business, but it is really up to you to work hard at making the most of all those new clients. 

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