Deal of the day sites like Groupon are like Marmite; you either love them, or you hate them.
Having said that, however, they are extremely popular, as people are constantly looking at ways in which they can save money, so they can be a worthwhile tool to help grow your business. Whatever your views are, if you decide to use them, make sure you plan your activity properly and protect your normal core business. Below are our tips on using the sites:
What do you want to achieve?
Generally, there are two objectives for using deal-of-the-day sites:
(a) To make money: although the money you make from each deal sold may be small, you can usually sell a lot of them and so overall it can work out to be profitable.
(b) To gain new clients: you will probably get a lot of new clients from the promotion and it’s true you probably won’t see any of them again, but treat every client as a potential loyal customer and try to win them over and incentivise them to return back to the salon. You may not make much money from the actual offer, but in the long run any new clients can really help build your business.
Calculate your costs properly
When you put a discounted price online for a service, the site will take a cut. Calculate the minimum you need to cover the cost of products for the service and then add on the site’s fee – this is your minimum price. If you are looking to make money then you need to calculate how much per service you want to make and add a margin on top. If you are doing it just for publicity and new clients, then you may not need the extra margin, but we would still recommend having a little buffer.
Be prepared that you will probably never see any of them again, ever.
Clients who use deal of the day sites are, well, obviously looking for a deal. So don’t be disheartened if they don’t rebook and disappear off into the sunset never to be seen again. They may go from salon to salon looking for deals and continually hunting for the cheapest service. If you only manage to keep and convert a handful into permanent customers then you have done well. However, being prepared for them not to return is different to just expecting it, so make sure you have a plan in place to turn them into your most loyal client ever…
Create an incentive to get them to rebook
They’ve come to you for a deal, so create a plan to keep them coming back and incentivise them to do so. If their original offer was 50% off a service, then maybe offer them 40% off if they rebook for a second and 30% off for their third booking and on their fourth it will be full price, but you would have been using a loyalty card with them on each visit so they can actually use that to get a discount or a free treatment that will help soften the blow of a full price visit. Anyway, by their fourth visit, you would have won them over with your fantastic customer service and skill. It’s all about transitioning softly from the discounted price to the full price.
(Also remember, that if they rebook with you directly then you aren’t going to be giving a cut to the deal of the day site and so even if you offer them a second visit at the same price, you will be taking home more money.)
Don’t jeopardise your current business
You don’t want your existing clients to start going on the site and using the deal, so it’s often good to restrict it to new clients only. As this may not go down well with your existing clients, run an activity for them at the same time as your offer is online. A free intensive mask treatment worth £10 for existing clients won’t add much time onto each visit and will cost you hardly anything, but will help make your existing clients feel like they aren’t missing out too much. They may even like the treatments so much that they start to pay them normally 🙂
Book clients in at the right times
There is no point in booking a deal client in on an busy Friday afternoon when you would have full paying clients in normally. Limit the days and times that the deal is valid for to when you are quiet and not turning away your regulars. Or, limit it to services that can be performed by a junior if you do get busy.
Be upfront
Make sure all your terms and conditions are listed up front on the site. Be transparent about everything: booking times, what is included and what is not, costs, etc. You want to avoid a client having a few extra foils or receiving additional treatments and then refusing to pay extra as they thought it was included in the deal. Make sure you communicate to them clearly if anything ask for will be extra.
Good luck, let us know how you get on.