Discount Coupon Programs – Yes or No?

Should you sign up for a coupon discount program?

There are a number of 3rd party coupon and promotion providers and whether you use Groupon, Living Social, Spa Finder, Amazon Local, Google Offers or another brand, all can help you build your business.  The best use of these platforms as tools is when you are building a new business, launching a new service within your existing business, or perhaps rebranding. We don’t recommend that you utilize discount marketing for very long – your business will not organically grow and you’ll find your books filled with “deal hoppers.”  You want people to come, enjoy your space and offerings, and then be motivated to come back to you, directly, because they love their experience…not because they can get a service done for cheap!n

Before you start negotiating with a 3rd party coupon provider

Do your homework

It’s important that you target your market carefully. Some providers allow you ZIP code targeting. Some have other demographic information they can provide to help you set parameters:  age, gender, history with the company, etc.  Others are not able to help you, but may have a larger following in your area. Ask lots of questions. And insist on true answers, not replies (“That’s a good question, I’ll tell you more about that later” is not an answer–it’s a reply.)

A good campaign, well planned can be very effective in bringing new souls through your door.

Plan Your Campaign

Before you speak to a sales rep about a coupon discount deal, decide how much you are willing to spend on an advertising campaign. Understand that these deals nearly always create a net loss to the business. In one example, a spa sold 1038 deals that created a net loss of $8.31 each. This meant the spa signed up without realizing they were committing to spending over $8K on advertising. ($8.31 x 1038 = $8,600+)

Understand the dynamics of working with online deal providers–the sales reps are commission sales people, and they only get paid if they sign up businesses. They are skilled at “closing the deal” and will use all the techniques they have at their disposal to get you signed up, as quickly as possible, so they can move on to the next client. Another pressure they are feeling is their manager is pushing them for content.

The providers constantly seek fresh new deals to offer their impetuous followers. They will  work with you–just be as insistent as they are. Negotiate every aspect: the # of deals, the amount they’ll go for, the % you’ll split with them, when you’ll be paid…every single thing. If you ask them for something and they say “No, we can’t do that,” simply say, “OK, that’s a deal breaker for me, thank you for your time” and move to end the call. They will not let you get away! Trust!

Plan Out Guest Services

Once you’ve chosen a deal provider and set up a campaign, make sure you are fully ready to perform. Stock your cupboards. Make sure staff is all on board. Write scripts–talking points–to go over with each client who enters.

• • Greet and welcome each guest

• • Give each guest a tour of the facility – cross promote other services

• • Have a sign in sheet harvesting contact information

• • Mention all the services you provide

• • Offer a beverage

• • Perform their services with your very best efforts

• • Invite them to rebook directly with you

• • Offer an incentive for them to come back (it doesn’t need to exactly echo the deal they purchased!)

• • Ask them to refer you to their friends (make it easy–give them some of your cards and a brochure)

• • Give them a promotional item to take with them that’ll remind them of their experience with you

• • Send a follow up email (per the sign-in sheet)

Summary

Things to do:

• • Plan your campaign – who will you target? How much will you “spend” on marketing?

• • Limit the number of deals you allow to be sold.

• • Set the pricing on your FULL top-of-the-line service prices, not on an already discounted package price.

• • Negotiate a greater split % – if your sales person balks, ask to speak with another sales rep.

• • Insist that you review the copy of the deal before it is published–one spa campaign talked about “soaking your little piggies”–not the image a day spa wants to convey.

• • Manage your booking. You have no chance of bringing them back a second time if you make them feel rushed or if you can’t take care of them properly.

• • Limit the number of “deal” appointments you make each week, leaving enough time for your regular clients and for rebooking those who enjoy their first experience with you.

• • If you are an owner building clientele for your business, don’t expect your staff to “eat” the cost of performing the services without being paid their full due. Your calculations should include labor costs when you’re figuring out the cost per service.

• • If you are a booth renter or a sole proprietor, make sure your monthly bills will be covered without the small amount of income created by a campaign.

• • Make every guest feel welcomed and provide an extraordinary experience for them. You’ve invested a lot to get them there, so make sure they leave with a great impression.

• • Do adjunct marketing when they are in your salon–give them a tour and explain all that you offer. Give them printed incentives (coupons or referral program cards).

Things to avoid:

Don’t…

• • agree to a sales campaign based on a time-frame with no limits on the numbers sold.

• • cave in to high pressure–the sales reps are on commission and they are highly motivated to make the most possible commission for the time they spend talking to each business.

• • sign the contract immediately. Take the time to sleep on it. The sales rep will create urgency but the only true urgency is their commission check.

• • lose control of your schedule. Deal buyers are impulsive. You will hear crazy stories to get you to book them right now–brides (“The wedding is tomorrow!”), birthday gifts, dinner parties, boyfriend coming home from Iraq…and on and on. Take the emotion out of it, and book responsibly.

Stand firm or risk it all.

Be sure of yourself – your offerings and your capabilities. Don’t give into sales pressure or client pressure because you want to provide the best possible experience for each guest. If someone asks you to go outside your established boundaries, ask yourself “will this help me provide a great experience for all my guests?” If the answer is “no”…then the answer should be “no.”