Using GroupOn as a marketing tool

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Permalink Reply by Deborah Yaffee CH CN on January 23, 2012 at 10:42am

Ask Tom Nicoli...I see that he did a groupon deal recently. 

I have been trying and trying to get our local area Groupon to take me on but it's been enormously frustrating....they tell me that they won't do hypnosis or reiki where I am.  :--(   Unless.......unless I give them my husband's cooking classes as the leader.  We don't want to do that because the way that Groupon works is that you offer your product or service typically at half price....so let's say your session is $100...they put it on Groupon for $50 .  You set how many sales you need to make it a "go"....so, let's say you won't let the deal run unless you have 10 people purchase by a certain date.  If it is a go, then the consumer pays $50 , Groupon keeps half and gives you the other half.  

But check with Tom....and let us all know what you learn!  :--)

Permalink Reply by Deborah Yaffee CH CN on January 23, 2012 at 11:10am

George...here is the link to Tom Nicoli's deal of the day on Groupon Boston

http://www.groupon.com/deals/a-better-you-hypnosis

so his deal was 59% discount on 3 weight loss sessions plus 2 cds....deal price was 199 and he sold 70....which means, theoretically, he got 7000 up front cash !  but....still....ask him if he felt it was worth it and if there was anything he didn't like about it.  

Permalink Reply by Juan Acosta on January 24, 2012 at 7:55am

George,

I can tell you how groupon and similar group buying sites work and hopefully that can help you make an informed decision about whether to sign up with them or not.

Let's say that your sessions are $150

Groupon (and others) will expect that you discount your services to something that is marketable by them. 50% off, for example. So customers are paying $75 for your session.

Groupon takes 50% of that off the top and they charge you credit card processing fees (keep in mind things are negotiable, but this is in general how they'll deal with you) which means that you'll get about $37 per session sold.

They send you 3 checks, each for a 1/3 of the total sales. The first check arrives about 10 days after your feature. The second in 30 days and the last one in 60 days. 

MY PERSONAL OPINION:
As nice as it is to receive a bulk payment like that (ie. if 100 sessions sell @ $75ea, = $7,500. Your portion being $3,700, so you'll get a check for $1233, 3 times) it makes the time spent working on 100 sessions pretty grueling, as you have been paid in advance and a rate FAR less of what it should be. 

So if you're able to book 24 sessions at $150 by yourself... you'll work MUCH less and be paid what you consider you're time is worth. The same $3,700 dollars. Can you book 24 clients on your own during the 3 month period that you'll be dealing with Groupon and 100 customers? That seems like an excellent question to ask yourself.

Obviously it depends on your business model whether that works for you or not. For me personally it isn't worth it.

- Perceived value hurts
- It brings mostly the bargain hunter
- It creates a habit in customers that they won't come to you unless there's a deep discount
- You feel like you're working for free once it's said and done

I have used Groupon for other businesses. I wouldn't do it for my HT practice.

Hope this helps,

Juan 

Permalink Reply by Kelley Woods on January 24, 2012 at 9:01am

I agree with Juan...at a recent conference I spoke with an experienced hypo who specializes in fitness and weight loss. He used Living Social to promote his weight loss, selling 130 or so individual sessions at the discounted rate. He was anticipating that after experiencing that first session, clients would sign up for more at the regular price and enjoy weight loss through hypnosis. Instead, he was disappointed to find the conversion rate to be very low.

The value of this type of promotion is to create customer loyalty (repeat business). As hypnotists, while we may get some repeat business and also benefit from referrals, most of our trade comes in the door for one to a few sessions and then drifts out the door (hopefully satisfied), never to be seen again.

An exception may be for a newly qualified practitioner, who wants to get a lot of practice under their belts...although it appears that these outfits are rather picky about wanting to align with established businesses.

Permalink Reply by Craig Eubanks on January 27, 2012 at 11:47am

In May, the topic of my Marketing & Practice Building Teleseminar will be on Groupon.

My Guest Expert has figured out how to get Groupon to work for his business and has used it to bring in over $20,000 in revenue.

Cheers,

Craig

Permalink Reply by George Mezinko on January 30, 2012 at 10:52am

Craig,

How can I find out about the dates of your teleseminars?

George

Craig Eubanks said:

In May, the topic of my Marketing & Practice Building Teleseminar will be on Groupon.

My Guest Expert has figured out how to get Groupon to work for his business and has used it to bring in over $20,000 in revenue.

Cheers,

Craig