We published a Groupon article in the last InSPAration Moments e-zine and we received many comments, here are a couple of them.
Brea wrote…
“You are absolutely correct about Groupon and the deal hoppers. I knew in my gut not to do it and did it anyway. Groupon sold 724 $100 gift certificates for $50. They took $20 and I received $30 per sale. You can do the math. Groupon made $14,480 on my hard work. We received $21,720 in three equal monthly payments after they deducted the credit card fees of $250 or so. So not only did they make nearly $15k, they used 2/3 of our month for the next two months. You can be sure they made some money on that too.
I had asked the Groupon representative for a list of the emails so I could manage the appointments and make sure people did not wait until the last minute to use their certificates. Groupon would not release the email addresses to me and instead said they would manage the people and remind them to use their certificates before they expire. Well – guess when they reminded 300 remaining certificate holders to use their certificates…7 days before expiration.
You can only imagine the anger and frustration it caused the gift certificate holders. We were nearly booked solid with Groupies the last three weeks and our regular clients could not get in. As they called and tried to get an appointment, we told them we had no appointments available…we were booked. They became irate, demanding and mean. They gave us excuses after excuses why they could not come in before now (they only had 6 months to make an appointment…how hard is that). For the ones that were the loudest, I extended their expiration by one month and asked them to pay an additional $20 (the Groupon portion). They did not like that, but it was better than not getting anything. A few called Groupon, complained and received their money back. Of course, Groupon can do that, they have plenty of “my money”.
Now I get calls from all sorts of deal days people like Living Social and others – I am sick of these companies. They want me to spend my time telling them why I did not like Groupon so they can convince me their program is so much better.
That’s it in a quick nutshell. There is probably more I could share, but don’t want to feel the pain. We perhaps gained 2 clients out of the whole thing and it’s not because we don’t do great work either.
These deals are not for spas – perhaps a restaurant or sandwich shop. Frenzy is a good way to describe the whole experience. A Piranha Feeding Frenzy”.
Brea Gratia, ND
Sanctuary Spa
Houston, TX
Here is what Angela had to say
“Groupon has been terrific for our business during recession. We are a premium brand chain in southern California and have structured our deals so that we MAKE money on each transaction and are VERY cash flow positive. I can’t think of any other medium that delivers thousands of new customers without costing us a dime – in fact it is a profitable proposition. One of the profit centers is breakage, which every business owner needs to consider. Our return ratio is about 15% which isn’t bad.
The only downside in my opinion is that we are encouraging bargain hunting behavior, but this will change once the economy gets better and the good deals (including ours) get fewer and fewer”.
Angela Cortright|Principal
Spa Gregorie’s|Relax, Renew, Rejoice!
What do you think? leave your comments for us.
