Really, really think these promos through — because it is hard to get customers and if you do something that looks like they were bamboozled… it is bad all around.

The truth of the matter is she fired me. 2nd, she did exactly what she's telling me not to do is solicit the other salon's clients who followed me from the other salon. As commissioned based employees, she also took our Sundays twice a month and began working us for marketing 6 to 8 hrs non-pay for the salon. 3rd, her unwillingness to work with my schedule for my number one concern to quit… as a single woman raising and sole provider for a household, I make it always clear and upfront prior to my employment that my son's schedule is my priority. Not only did she take all my days off for mandatory meetings but began scheduling them at 7:45 a.m. before school started. At the end, she proved her authority over me by stating, "Ultimately, I'm your boss and you have to do as I say."

Prior to working for her salon, I've been in the area for 3 years and built my clients there as my previous employer did not have a non-compete. How does she expect me to survive as a head of household and and caring for a child? Salon owners need to empathize and be caring as well!

Now, I realize that these comments are anecdotal, but it forced me to think long and hard whether Groupon-like advertising was right for my salon and spa business. How many of these people are visiting my salon because they could not afford it otherwise and does this mean there is no opportunity to upsell beyond a $15 brow wax? If I do a Groupon and sell 50-100, 1/2-off services, how am I going to pay my employees their commission? I can't really ask them to work for free! How do other salons afford this? Do they give Groupon people to their junior stylist or therapist (who they are paying hourly) and hope they can handle the influx of people? Will the Groupon client write a bad review if the junior stylist doesn't meet their expectations? And the most important question: If you limit the Groupon deal to new clients, how will your loyal clients feel? I don't know about you, but if my loyal clients saw that I was offering a Groupon Deal for 1/2-off, they wouldn't be happy. Conversely, if the Groupon deal was open to everyone, how many of our regular, paying clients would buy-in? OUCH!

In my view, Groupon is better suited for a restaurant or coffee shop where there is a better opportunity to upsell and the employee is paid hourly (not commission). Unfortunately, I am seeing many "upscale" salons and spas jumping on the bandwagon. I recently saw a struggling competitor succumb to a ridiculously discounted group buying deal. To me, in this industry, it is a desperation tactic. Unfortunately, it is dragging all of us down by eroding our prices and changing consumer behavior. Small businesses will take longer to recover in this recession and will delay hiring new staff while they try to recover their pricing structure. We might hold off buying new equipment or making capital improvements. Groupon-like businesses are not helping the recovery, they are delaying it. I also find it interesting that Groupon employees are combing through the internet and replying to discussion boards to defend their business model.

In helping promote the event, I've noticed the most successful spas have been promoting the event online- which gives us the opportunity to re-tweet, blog, and update our Facebook page to amplify their word of mouth marketing. To be fair we're promoting 600+ spas in 39 US states (and DC) it'd be unreasonable to every spa to have a runaway success. However I've heard measurable excitement from consumers, many of whom would be otherwise reluctant to get spa treatment under this economic stress, since these promotions offer a strong and meaningful incentive that encourages brand/spa loyalty.

1. Groupon and business brands — Groupon, from the beginning, has been all about exposing people to fun, quality businesses and activities in their cities. We only feature a mix of highly-rated businesses and we do everything we can to make sure both the business and consumers have a great experience. Because of this, the majority of our subscribers see our deals as opportunities to discover highly-regarded businesses and try new things — not as a way to get cheap deals.

   In addition, the one-time, one-day-only nature of our deals does not condition people to expect consistent discounts from one specific business. In fact, it is the opposite — when people see a Groupon they know they have to act quickly in order to take advantage of an unbeatable opportunity.

2. Groupon buyers — The Groupon customer demographics are highly attractive (70% female, high income, highly educated). Most of them are not serial deal buyers, moving from one spa deal to the next. As mentioned above, they want to find interesting new businesses in their neighborhoods. Because of this, the vast majority of our business customers have had great results and are strong advocates for Groupon.

A business' goals when running a Groupon are essentially the same as those with other marketing channels: get new customers in the door, after which they strive to give them a great experience and convert them into repeat business. Groupon, in addition, has big advantages — it is highly trackable, requires no upfront investment and results in a great deal of media exposure and word-of-mouth.

Thank you for the opportunity to post and add to the discussion. Hopefully this helps, but feel free to let us know if we can answer other questions. Our site for businesses, GrouponWorks, has a lot of information and case studies that talk to the points made above.

Thanks,

David Rangel