Thread: Anyone used Groupon?

Has anyone tried using Groupon to grow their customer base or other aspect of their studio? If so, how did you like it and what kind of deal did you offer?

I haven't personally used it, but Cera Byer of San Fransisco did for her studio and seemed to have a tremendous response.

http://www.shoeboxsf.com/

Did the 'tremendous response' translate to long-term customers paying full price?

I've thought about using Groupon but with every day bringing a new ad campaign (and sometimes a second one piggybacked on to it) I've started having my doubts. The thing that is going to make (and maybe already is making) Groupon very successful is that THEY become what the customer is developing a relationship with. Every day a new restaurant at deep discount, every week a new fitness place with a deeply discounted package. This relationship building is at odds with the merchant's need to develop a relationship with the potential customer.

Very similar to the roaming fitness clubs who want a group class at the studio at a discount because of 'exposure.' The roaming fitness clubs do NOT want 'their' customers to decide to linger.. they want to keep them moving and keep paying subscriptions!

Groupon's long-term results have got to be speculative at this point but here's an article that resonates with my point of view:
http://www.clickz.com/clickz/news/17...ird-businesses

'Groupon customer base is made up of deal-seekers and bargain shoppers' means no long term dance customers, I think.

If someone is interested in bellydance enough to take one class, there is a decent chance (for example 25%) that the person will want to take several classes and maybe turn it into a regular hobby.

Groupon and Living Social aren't about immediately building up a great customer base. The power of those sites is that the business owner can partake of low-risk, effective advertising and actually bring in a little revenue. The onus is on the business to turn these people into regular clients.

If a business gets a bunch of people through the door and then offers crappy customer service and/or little to no follow-up marketing, it is a pointless exercise - even if the product is good. I have seen that happen and it is ugly. It just creates bad word-of-mouth that wouldn't have happened in the first place.

So, if you are ready to offer a great product, great customer service, and great follow-up, you will probably get a lot out of using those coupon sites.

I'm a regular customer of Groupon, mostly for restaurants. It is a way for me to try new places without risking much money. Without it, I usually eat out where I know the food it good or where my friends take me. If the restaurant I tried with reduction is good, I'll add it to my pool of places to eat. That said, with the amount of good deals, sometimes you are kept busy.

I'm like Bellissima. I use Groupon to get a discount to try something out and if I like it, I'll keep coming back to it.

I just bought one last week for 2 Pilates reformer classes and 2 barre classes for $30 at a studio near me. I had been thinking about trying this package directly from them but was hesitant to spend the $80 in case I didn't like it. Now, $30 I can swing and if it doesn't work out it's not a lot of money. If it does work out, I will keep going on a regular basis.

So while you probably will get people who want to try it out and then don't stick around, you'll probably get people who do want to continue. You'll just have to decided if it's worth it to you.

The discounts are so severe that I wonder about the repercussions. A local school of ballet sold over 400 packages of 11 dance classes for $50 each. Since Groupon takes half the take, this means that the school has now committed to supplying 4400 people-classes for $2.25 per class instead of their normal $12.75, or $56,000 worth of classes for $9800. Also keep in mind that Groupon retailers find that existing customers often buy the coupons for themselves. (We had the same thing happen when we tried coupons for a workshop.)

IF the school's existing students didn't buy the coupons, and IF the school can gracefully handle those new students showing up the next week without having to provide extra space or teachers, they'll make a little money, yes... $2.25 per student per hour. But what are the odds of all three conditions occurring at the same time? And how many of those those new people are going to stick around when it is time to move on to the next deal, twenty?

Sheer speculation on my part. But these speculations are why we haven't tried Groupon. I still think Groupon is about Groupon, not about the retailer. (Duh!) If someone sticks with a studio they find through Groupon and don't move on after a couple of months, Groupon won't make any more money off them. It is NOT in Groupon's interest to match customers to retailers. It is in Groupon's interest to match consumers to bargains. Continually. So I say.. follow the money.

Originally Posted by Samira_dncr

I haven't personally used it, but Cera Byer of San Fransisco did for her studio and seemed to have a tremendous response.

http://www.shoeboxsf.com/

Thanks for the info! I'm interested to see how well it works out for a business that offers a teaching environment (as opposed to just a store or restaurant were people can use the Groupon whenever).

Originally Posted by maurazebra

The discounts are so severe that I wonder about the repercussions. A local school of ballet sold over 400 packages of 11 dance classes for $50 each. Since Groupon takes half the take, this means that the school has now committed to supplying 4400 people-classes for $2.25 per class instead of their normal $12.75, or $56,000 worth of classes for $9800. Also keep in mind that Groupon retailers find that existing customers often buy the coupons for themselves. (We had the same thing happen when we tried coupons for a workshop.)

IF the school's existing students didn't buy the coupons, and IF the school can gracefully handle those new students showing up the next week without having to provide extra space or teachers, they'll make a little money, yes... $2.25 per student per hour. But what are the odds of all three conditions occurring at the same time? And how many of those those new people are going to stick around when it is time to move on to the next deal, twenty?

Sheer speculation on my part. But these speculations are why we haven't tried Groupon. I still think Groupon is about Groupon, not about the retailer. (Duh!) If someone sticks with a studio they find through Groupon and don't move on after a couple of months, Groupon won't make any more money off them. It is NOT in Groupon's interest to match customers to retailers. It is in Groupon's interest to match consumers to bargains. Continually. So I say.. follow the money.

hmmm...very good points! Thanks!

FYI, Groupon will use whatever verbiage they choose to promote your event; you have no say or approval of promotional content except for the accuracy of specific details (time, location, etc.). For example, I was recently involved in promotion of a Ballet production for which Groupon chose to add what the event sponsor considered sophomoric humor in its blurb, but the sponsor had to "take it or leave it" (my words) since the powers-that-be at Groupon feel their own writing is most clever and productive in selling tkts. YMMV depending on who at Groupon writes your copy, but if you're opposed to them writing something campy about your event, double-check before ok'ing.

Below is a direct [partial] email quote the sponsor mentioned above received from a Groupon rep:

"....Please remember that keeping our content within the engaging, entertaining Groupon voice is critical to the success of every deal. Our transparent, independent voice is why our readers trust our recommendations, and our humor is why they keep reading every day. As I mentioned before, this is why we don't accept language suggestions or direct copy from our clients...."

-Devora

Originally Posted by Devora

Below is a direct [partial] email quote the sponsor mentioned above received from a Groupon rep:

"....Please remember that keeping our content within the engaging, entertaining Groupon voice is critical to the success of every deal. Our transparent, independent voice is why our readers trust our recommendations, and our humor is why they keep reading every day. As I mentioned before, this is why we don't accept language suggestions or direct copy from our clients...."

That is amusing because I always avoid reading their blurbs because they're usually insipid. I think they're not doing themselves any favor with those things and I know I'm not the only one who thinks that.

Originally Posted by coffeegoddess

That is amusing because I always avoid reading their blurbs because they're usually insipid. I think they're not doing themselves any favor with those things and I know I'm not the only one who thinks that.

My sentiments exactly.

Originally Posted by Lauren_

My sentiments exactly.

Same here. We use Groupon on occasion, but it certainly has nothing to do with their ridiculous copy.

Originally Posted by GenevieveOfAtlanta

Same here. We use Groupon on occasion, but it certainly has nothing to do with their ridiculous copy.

Ditto. I find it painful AND uninformative. I LIKE info before I spend my money. But I'm probably not their target market.

Interesting. I definitely am a Groupon shopper, because I like deals, and I would probably try a class out at a discount. It's hard to say if I'd stick with it or not. Maybe. It would be up to the studio.

As many as 40% of people who purchase the coupons from Living Social or Groupon never end up using their coupon (I heard this from a company rep - forgot which company).

Yes, existing students buying coupons is a problem. My ideas to avoid it would be trying to limit the level of the class that people can by coupons for (if the program lets you) because if you only sell beginner or workout classes less of your established intermediate or advanced students would take advantage of it. You could also use this to launch a program - like bellyrobics - just for the coupon people that gets them through the door so you can wow them with what a great studio you are.

This type of program is not for every business model, but I still think if you are smart about it and have a business structure that is conducive to it, this can be a wildly good thing for the right business. See my point above about customer service. It is good to think it through!

Originally Posted by maurazebra

The discounts are so severe that I wonder about the repercussions. A local school of ballet sold over 400 packages of 11 dance classes for $50 each. Since Groupon takes half the take, this means that the school has now committed to supplying 4400 people-classes for $2.25 per class instead of their normal $12.75, or $56,000 worth of classes for $9800. Also keep in mind that Groupon retailers find that existing customers often buy the coupons for themselves. (We had the same thing happen when we tried coupons for a workshop.)

IF the school's existing students didn't buy the coupons, and IF the school can gracefully handle those new students showing up the next week without having to provide extra space or teachers, they'll make a little money, yes... $2.25 per student per hour. But what are the odds of all three conditions occurring at the same time? And how many of those those new people are going to stick around when it is time to move on to the next deal, twenty?

Sheer speculation on my part. But these speculations are why we haven't tried Groupon. I still think Groupon is about Groupon, not about the retailer. (Duh!) If someone sticks with a studio they find through Groupon and don't move on after a couple of months, Groupon won't make any more money off them. It is NOT in Groupon's interest to match customers to retailers. It is in Groupon's interest to match consumers to bargains. Continually. So I say.. follow the money.

Originally Posted by Elianae

Interesting. I definitely am a Groupon shopper, because I like deals, and I would probably try a class out at a discount. It's hard to say if I'd stick with it or not. Maybe. It would be up to the studio.

I second Elianae... I would be much more inclined to try it with the Groupon, and whether or not I stay depends on the studio itself.

I've seen a number of Groupon/Living Social/Half-Off Depot deals come through my inbox with restrictions that help protect the retailer. I've purchased several restaurant deals and a spa package that can only be used during down times, like weekdays. Dance/yoga studios and salons often only allow new customers/students to redeem the coupon. I think that if you really think through ways to protect yourself up front, it could be valuable for certain business models. And, as someone else mentioned, many of the deals sold will never be redeemed...which means money for practically nothing. Not that you can really count on how often that will happen.

However, it seems like Half-Off Depot may be your best bet if you have that service in your area--from what I can tell, you can actually limit the number of coupons you want to offer. That way you're not stuck with more "half-off" students than you can feasibly handle.

Originally Posted by maurazebra

Ditto. I find it painful AND uninformative. I LIKE info before I spend my money. But I'm probably not their target market.

Maybe we should start a Bhuz letter-writing campaign to Groupon, letting them know that many of us might be more inclined to buy--and buy in--if they didn't write such juvenile copy.