Groupon's revenue is down in July
August 27th, 2011 • Posted by Seth Gardenswartz • Permalink
Daily deal data aggregator Yipit reports that the top 20 daily deal markets declined by 7% in July, with market leader Groupon down by 4%. It will be interesting to see what Groupon has to do to generate the cash to pay all of its spas, salons and restaurants, since it generally needs to keep growing to make its business model work.
Is there any survey that anyone knows of that shows whether doing a Groupon has been a positive or negative thing, specifically as viewed from holistic spa owners' perspectives? We've been approached many times by Groupon, but we have never seen the need, nor the benefit of making 1/4 the profit on a session as we usually would… I'm curious though as to what others experiences are, for example when taking into account the fact that perhaps many Groupons are never redeemed, that Groupon clients are not able to reschedule in a timely manner (due to a big uptick in business from the Groupon), etc.
Alan:
There are many surveys showing dissatisfaction and a few that show more positive experiences. One of our recent posts garnered 11 responses, few of which we positive. You can read that post here. There is a good discussion of the fact that lots of businesses like the idea or Groupon, but have a poor experience when they actually try it here.
on group deals. I have been in practice for over 14 years and when last year I was injured and couldn't work for eight months the idea of being able to practice again was up in the air for me. I signed my name to the devil or so I thought. I didn't choose groupon though because their payout was more for their benefit then mine. I chose UrbanDealight instead.
In total honesty for me. I don't regret it compared to how I feared in doing it. I have always prided that offering discounts cheapens our work. Well when your self employed and solo practice I didn't have the means to live off the land and do something else. While I heal.
I chose the group deal and I have found new clients and I am back rolling in again.
What I did different to sustain. One, group clients were second compared to regular paying clients. Given I see 20 clients a week, I reserved 10 for group deals and 10 for regular paying clients. I upsold to my other services and membership packages.
I took control of how much can be sold. Many spas did not, they thought of greed instead and got themselves in over their head and are regretting, you tell the group deal this is for new clients only and only one can be purchased per new customer and one gift. The point is to get new clients not have one that you see 10 times those clients are red flags where loyalty won't be a return. Make sure that it is stated in large print that tax (if you apply) and tips are not included because believe me even though its common sense to tip, this is where groupdealers take advantage by not.
Also, know that you will get customers that treat you like a doormat…let it be known your not, and let this be your way of weeding clients you want and given its not a big deal, state that they are unhappy and you are unsure of this kind of relationship is healthy and that who ever they purchased the deal from will refund them their money…
NO IFS ANDS OR BUT……and also..people will call and ask for deals even after the expired..say no…it may seem better to be off the books with the group deal to do a deal on the side..don't because you will cheapen yourself by making it okay to make deals when you shouldn't.
Group deals is an expensive marketing expense…no this before you cry about eating crows…and also…don't…don't..don't do packages of hair, massage, manicure…for $30 you are hurting your contract employees…make it a choice for the group dealers folks..hair or massage or manicure….