Any GOOD experiences out there with therapists using Living Social or Groupon?

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Permalink Reply by Sreed on July 1, 2011 at 12:57pm

I worked for a massage clinic who ran a groupon and it nearly crippled the business and the therapists, groupon didnt disclose the fact that they can limit the amount being sold, so when 2000 were sold, the owner decided to take more money from the therapist, to recoporate her costs (she wasnt making anything from it originally but decided to take about $1 from the therapist for each appointment then it was $3 then $5)

She ran the Groupon to keep the business busy and to create more loyal clients, in the end that didnt happen. She treated the groupons poorly and it shows in all the bad reviews on line. also she lost a 4 or 5 awesome therapist who couldnt work for the subpar pay anymore.

So it was the owners fault why it didnt work out, but I agree with relax&rejuvenate it can be great for sole practitioners, but for a business its a dangerous game to play. You really have to know where your business is at (expenses) and if you can afford to live off a huge split in your income, and of course know how many clients you can take a day. In other words DO YOUR HOMEWORK (thanks Alyson your comment help me reorganize my thoughts lol)

 

On the flip side if you have no clients then the this can get you a huge client database, then you can just run your own specials for free and keep all the profit!

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Permalink Reply by Hillary Kate Arrieta on July 5, 2011 at 1:44pm

It's true that these companies are "parasitic" in some ways but I ran my deal Thinking of it as a way to attract new clients so that they could experience my massage and rebook- which has happend ( many of them in fact!)
I did not do it with the intention of making money- only to attract new clients. You will not make a ton of $ from running a deal but you won't have to stand in a super market offering free chair massage if you do. So that is a win for me.
I went with a smaller company- called Buy with Me. So far so good! Met some really nice people and acquired several weekly clients.

Relax & Rejuvenate said:

Some discount services may be worth it, but I think the business proposition to the spa/therapist is fundamentally flawed.

 

1) They build clientele  -- BS, or at least not the clientele I would want. They "brag" that they reach new clients across NYC with their specials, that is not a selling point, quite the opposite. If you believe the build a clientele, you have to believe that New Yorkers buying 1/2 price spa services will someday shun all other 1/2 price services from Groupon/LS and all their competitors, trek across town, passing dozens of spas along the way, and pay full price for your services because they were so blown away by the 1/2 price deal that all that effort is worth spending 2x as much money. I don't think so

 

2) They have "high-value" clients. More BS. Check out reviews on YELP or TripAdvisor and you will find a remarkable correlation between the price paid (low) and the amount of complaints (high). "i paid $99 on Hotwire for a $400 hotel room and they gave me the smallest room in the house, blah, blah blah"

 

3) They have "high-value" clients II. "Deal" clients are treating themselves. When a 1/2 deal is a treat, they can't afford you the other 364 days of the year, can't afford to spend anything on products, and are very unlikely to rebook

 

4) They are creating a "bargain" culture and denigrating the services received. Perception is reality, and high priced is perceived as better.

 

5) anyone whose business model is predicated on YOU taking a 50% haircut, then handing over 50% of what remains to them is not a sustainable business model. It is a parasitic one. The parasite ultimately devours the host and moves on to another host. When you lose money on a treatment, the more you do, the more you lose. You don't make it up on volume.

 

6) They don't believe in their own business model. If they did, they would be willing to charge 0% for offering the deal and ask for 100% of revenue from all repeat business for the next 6 months. Every "deal"sales person i spoke with would claim how great they are at driving repeat business, but are flabbergasted when i ask them to put their money where their mouth is.

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Permalink Reply by Emmanuel Bistas on August 17, 2011 at 10:01am

Interesting read: http://blogs.hbr.org/cs/2011/08/groupon_doomed_by_too_much_of.html

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Permalink Reply by Solex on August 17, 2011 at 10:59am

Groupon has a feature called "Groupon Now". We use that at SOLEX and have had some really good results. Groupon and Living social tend to require more up front than a smaller facility can offer. But by running Groupon Now, you can control how many you can sell and what times the coupons are good for.

Like I said, it works really well for us

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Permalink Reply by Norm Green - My Receptionist on August 24, 2011 at 4:28pm

 

If owning and operating one’s own business was easy... we'd all be doing it!

Just like making any sound business decision, do your homework, talk to others who know more than you on the subject and calculate the pluses and minuses as they relate to you and your situation. If it is a 'go', then create a plan and process on how to maximize your efforts and investment.

We've worked with many of our clients who have done every type of deal out there. Some have done it right and others have not done so well (the ones that did not ask us for help before they ran one, and just went and did one, and then told us after the fact are the ones that did not do so well).

For any type or size of practice… the reality exists for money to be made or for ones business to be ruined, depending on how well you plan and execute this type of promotion.

Here is a link to a blog I wrote months ago on this subject:

http://www.myreceptionist.com/index.cfm/event/blog.entry/entryId/445/

There is also another lengthy discussion already on this site:

http://www.massageprofessionals.com/forum/topics/do-you-have-a-grou...

The bottom line is... if you are going to do one, do it right. Do the math. Plan. Then plan again.

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Permalink Reply by Amanda James on October 31, 2011 at 4:29pm

I agree with you very much, as long as you do your research and still provide your 1/2 price clients as if they are paying top dollar you can succeed. If you treat people like they are only in for the deal than they will be. I talked to living social today about running an ad and I'm very excited about the business exposure and being able to get the word out about how much massage can help. If you are doing massage solely for a big pay check you need to reevaluate why you are a therapist. Help others and they will in turn help you.

Alyson Schlobohm said:

I won't say I disagree with what you've said 100%, but it sounds like to me that you've never run a special with Living Social or Groupon. I must say, when I first spoke with Groupon, their "I'm doing you a favor" attitude rubbed me wrong. I was fortunate enough to find out about their competitor, Living Social, before I ran with Groupon, and still say to this day that it was the best decision I ever made. I had just started out on my own as a Massage Therapist - fresh out of Massage School and renting a room on my own - so I was struggling to find affordable means of marketing myself. Living Social gave me 24 hours of FREE advertising with their email blast, and I even had people call and ask if they could just book an appointment with me directly.

 

On top of that, within 6-months I had a base of about 35-40 clients - again, that was only 6 months of finishing the program and going out on my own. These 35-40 clients were using the discount services to find a Massage Therapist that was a good fit for them, and they've been faithful to me ever since.

 

The chunk of change my "run" with them put in my pocket allowed me the financial freedom to pursue other forms of marketing. 

 

Finally, I vividly recall both companies asking me several time if I was comfortable with the amount of business it would bring to me. I developed an Excel spreadsheet as long as my arm with all possible scenarios including the 50% off, my 60% cut, estimated taxes, how many massages I would have to do per day to fulfill my number of purchasers, how many other clients I could accomodate per day, etc., etc., etc., etc.

 

Bottom line - do your homework, know what you're getting in to, get EVERYTHING in writing, and you CAN be successful and happy with running a special with Living Social or Groupon.

Relax & Rejuvenate said:

Some discount services may be worth it, but I think the business proposition to the spa/therapist is fundamentally flawed.

 

1) They build clientele  -- BS, or at least not the clientele I would want. They "brag" that they reach new clients across NYC with their specials, that is not a selling point, quite the opposite. If you believe the build a clientele, you have to believe that New Yorkers buying 1/2 price spa services will someday shun all other 1/2 price services from Groupon/LS and all their competitors, trek across town, passing dozens of spas along the way, and pay full price for your services because they were so blown away by the 1/2 price deal that all that effort is worth spending 2x as much money. I don't think so

 

2) They have "high-value" clients. More BS. Check out reviews on YELP or TripAdvisor and you will find a remarkable correlation between the price paid (low) and the amount of complaints (high). "i paid $99 on Hotwire for a $400 hotel room and they gave me the smallest room in the house, blah, blah blah"

 

3) They have "high-value" clients II. "Deal" clients are treating themselves. When a 1/2 deal is a treat, they can't afford you the other 364 days of the year, can't afford to spend anything on products, and are very unlikely to rebook

 

4) They are creating a "bargain" culture and denigrating the services received. Perception is reality, and high priced is perceived as better.

 

5) anyone whose business model is predicated on YOU taking a 50% haircut, then handing over 50% of what remains to them is not a sustainable business model. It is a parasitic one. The parasite ultimately devours the host and moves on to another host. When you lose money on a treatment, the more you do, the more you lose. You don't make it up on volume.

 

6) They don't believe in their own business model. If they did, they would be willing to charge 0% for offering the deal and ask for 100% of revenue from all repeat business for the next 6 months. Every "deal"sales person i spoke with would claim how great they are at driving repeat business, but are flabbergasted when i ask them to put their money where their mouth is.

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Permalink Reply by Relax & Rejuvenate on March 2, 2012 at 11:17am

Could not have said it better...

 You don’t do drugs, so why do flash sales? (well, maybe not everyone here...)

http://www.hotelsmag.com/MembersOnly/blog/BlogDetail.aspx?topicID=1...

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Permalink Reply by Lee Edelberg on April 7, 2012 at 2:54pm

I'm self-employed with a private studio in a town of 30,000. The area is saturated with MT's and other body workers.  I'm just at the end of a 1-yr Groupon feature.  Last April (2011) I sold 253 sessions at half-price for a 75-minute massage.  Groupon takes 1/2 of that plus 2-1/2 % for credit card fees. So I  got a little less than $20 per sale.  

 

The good: a lot of people tip, maybe 1/2, and usually $20.   Many of them were nice enough people who I would be happy to have as clients.  A smaller number were obviously not interested in my work at all except to get their cheap massage. And then there were a certain number of people I HOPE never call me again.

 

Groupon paid all the money within 60 days of the feature closing, so I took in almost $5,000. Very handy.  After that I worked free excepting tips. 

 

Some things surprised me:

 

I have picked up almost NO new clients. Maybe 4 or 5.  People responded well to my massage and many talked about rebooking, but have not.  My comments on the Groupon site run about 85% positive and there is no "bad press" about me online, so it's not my technique. I do a modest follow-up email and at Christmas sent a promotion to everyone who had come in to date.  From this point of view, it's been a failure. 

 

I think it's partly the state of the economy since long-time MT's in business locally are complaining that it's never been this bad, and partly due to Groupon itself. Every 2 or 3 weeks someone runs a 1/2-price massage Groupon and it's hard to believe that it's not influencing the market here.

 

Lastly , what seems truly bizarre, is that with 21 days left til expiration, only 1/2 of the original 253 have been cashed in.  There are over 100 people out there who paid their money and haven't contacted me yet.  The calls have stepped up some in the last week or so, but in no way close to the number still out there. So that will change the final tally of $ per session.

 

FWIW the Groupon staff is very accessible and easy to deal with.   I'll update in 3 weeks after it's truly finished.

 

 

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