Who doesn’t love a good deal?
In fact, deal-seekers (Groupon Junkies) have pretty much become their own demographic. That’s why we have companies that have based their business models solely on the fact that we like to save money!
I’m sure most of you have either used or heard of Groupon.
You’ve probably scrolled through the platform at some point in time (guilty) to see if you could catch a steal!
But as a business owner, the experience is entirely different.
You might assume that using Groupon would be a good way to generate business, but this definitely isn’t a given.
And I learned this the hard way.
The first 3 times (yes, it took me 3 tries to figure something out) I used Groupon for my spa business, it didn’t work out exactly as I thought it would!
It was such a nightmare.
Ultimately, I kept going back to the platform because I really wanted to figure out why it wasn’t working for me. I decided that I’d be more open-minded throughout the process, and I’d apply my entrepreneurial mindset (more about this later) to it!
Although it did take me a bit of time, I finally got results.
Let me be clear on the point that I’m trying to get across. I am not trying to tell you whether Groupon is a good idea or a bad idea for your business. Instead, I just want to share with you everything that I learned from using this platform – the good, the bad, and the ugly.
With each failed attempt, I learned a little more about what I was doing wrong and where I needed to make changes to my approach.
The most important thing that I learned from using Groupon as a spa owner
The main takeaway here: it’s not a given that you’ll generate business.
Before using Groupon, come up with a gameplan!
Without a solid plan in place, not only will you not generate the right business, but you can end up losing money from the products and the extra manpower that you wind up using!
To keep it simple: figure out what your goal is and be specific.
Are you just trying to get your name out there? Are you trying to test the market to see if a new treatment or product will be well-received?
Making Groupon work for your business requires you to devise a strategy where you can both maximize your gain and minimize your costs.
From my personal experience using Groupon as a spa owner, I’ve created a PROS and CONS list for you!
PROS of using Groupon as a spa owner
You’ll have a steady stream of traffic!
Using Groupon will increase the traffic at your spa, because you either have clients coming in to redeem their voucher, or you have those that didn’t purchase a voucher BUT are interested in another type of service your spa provides.
And they know about your spa’s services because your Groupon posting has left an impression on them!
2. Gives your staff an opportunity to gain experience working with clients
As a spa owner, you want your staff’s skill level to be top-notch!
The better your staff is at providing their services, the happier your clients will be.
The happier your clients are, the higher the chances will be that they’ll keep coming back AND refer their friends and family!
Groupon is a great for training purposes, because your staff gets the opportunity to gain experience in a specialized type of service (whichever service you have listed on Groupon).
Perhaps, there’s a new treatment available and you want to test out if it’s going to be well-received before making the commitment to offer that service long-term.
You’ll have a steady stream of clients coming in for that specialized service and they can offer you feedback!
It’s a win-win situation for you and your client.
YOU get to gauge the market and they get a great discount!
3. Cost-effective marketing strategy
Your brand is essentially getting more exposure through your Groupon listing!
Even if people aren’t interested in your offer, there are so many people scrolling through Groupon at any given time. That said, your listing will get your name out there!
It’s all about getting your name out there and letting people know what you do!
According to The Balance, it’s difficult to build awareness for your business or brand by relying solely on Google to get the word out!
Because of its tricky algorithm, it’s not for certain that your business will even show up on the first page of search results. With Groupon, you don’t have to stress about how your business will rank, because most people will see your listing!
It’s quite possible that your spa’s name is the first thing that pops into a Groupon user’s head when a friend mentions that they’re looking for a local spa!
4. Steady business
When you work in the spa business, you’re going to have those super slow seasons.
And not only are you NOT making money, you get to be the lucky person to cut hours!
Of all the things I DID NOT like to do as a spa owner, sending staff home early or laying them off was truly at the top of that list.
By using Groupon effectively, you DO generate traffic. It can help you maintain some sort of consistency in the amount of hours you can afford to give your staff!
5. Grow your clientele
Your spa gains exposure through your Groupon listing!
With Groupon, you’re going to get those clients that just come in to use their voucher and you never see them again.
They ghost you. They wanted a deal and they got it.
That said, you’re also going to have those who DID only intend on redeeming their voucher the one time BUT you end up blowing them away with the quality of your services!
If you offer an exceptional level of service, these clients will keep coming back – Groupon voucher or NOT!
By implementing an effective business strategy with how you use Groupon for your spa business, you can definitely control the issue of only having those one-timers!
The Balance provides suggestions on how to make Groupon work for your business.
The takeaway here is you really need to figure out how to control and leverage what you are offering to make sure you can convert one-timers into returning customers!
What to keep in mind when developing your business strategy:
- Set a limit on the number of vouchers that will be sold
- Add restrictions to limit how people can take advantage of the deal you’re offering
CONS of using Groupon as a spa owner
1. It will cost you money
Without a gameplan, your Groupon listing could end up costing you a lot of money.
It’s incredibly important that when you’re figuring out your business strategy, you do the calculations! Because, if your voucher offers a huge discount on a treatment that requires your most expensive products … that’s just a disaster.
Not only are you not going to make much of a profit, but you’re going to be losing A LOT of money. And I’d hate to break it to you, but these clients are probably not going to come back for the same treatment at regular price.
You’re also going to be losing money on wages!
Because you need to service your regular clients and your influx of Groupon clients, you’re going to need the manpower!
2. Unforeseen circumstances
You really need to figure out a strategy to control how many Groupon clients are coming in at a given time to redeem their vouchers!
Because if you don’t plan accordingly, you can get an overload of Groupon clients coming in which will limit you from tending to the clients that are paying FULL PRICE for your services!
3. Groupon doesn’t have the best customer service
I haven’t had the best experiences with Groupon’s customer service department.
They tend to fall off the face of the planet when you need them the most to solve an issue. It’s even worse if you’re trying to stop your Groupon promotion!
Figure out your goals and get started!
Some business owners have great experiences using Groupon, and some DON’T.
I’m lucky enough to have been on both ends of the spectrum.
If you’re thinking about using Groupon for your spa business, PLEASE think long and hard about what type of approach you’re going to take!
You cannot go into it with the mindset that you’ll instantly generate a profit from using the platform!
I cannot stress this enough.
Figure out what your goals are, devise a business strategy on how you’re going to control or set limitations on how your vouchers are being used, and understand that it’s not a guarantee that you’ll generate a profit the first few tries!
Stay tuned for my article on how I made Groupon work for me by applying my Entrepreneurial Blueprint Mindset to my approach!