I have mixed feelings on discounting services. I feel that it changes the perceived value of the service. It also may not give you the quality lead you are trying to attract to your business. It really depends on the approach. One approach is looking at it as creating another venue for word of mouth advertising. Meaning, if a lead comes in and doesn’t purchase but had a wonderful experience they will share that with other people. That is valuable marketing. But…if they did not have a good experience the repercussions can be costly. I have participated in discounting a few times, my goal is to keep the studio visible in the consumer’s eye. The ad tells something different about the studio. They may not purchase a coupon but they will know we exist.
I own a pilates equipment studio and have used Social living for 2 privates, new clients only, and Groupon for Intro group equipment classes only (min 4 max 7 people per class), new clinets only, at the 50 % off rate. Our groupon did work becasue a current client bought it as a gift for mom, hubby and friend. 2 of the 3 redeemed and both have continued at regular price. The Social living group classes:, only 2 out of 13 continued and of course i lost money on paying instructors. wouldn’t do again. Actually I’m glad to see it wasn’t just my pilates business that didn’t do well and others felt the same.
One thing to keep in mind…the Groupon /S.L. companies say the typical client is purchasing to try you out at a discount, not just coupon shopping…not sure if that is true. We did get some calls after the offer was over for our services …good exposure. If I place an ad in the local paper and get no response for $450 – $500 a month I have spent money with no results. The groupon you do get some money back for your effort. I find with regular ads in the paper, the 2 times in 10 years I offered a trial discount, I maybe sold one package…so discounts arent good to do any way….McDoanlds owners don’t like all the discounts either ( my husband was a franchise owner).
I personally don’t offer Groupons but the gym that I contract with does for a few services. I’ve been told that it really does compromise the quality of the services as many people will only use your company as it offers a substantial discount, but are not willing to pay your usually fees.
You’re prices are almost cut in half by the time the groupon goes into effect, but is your staff really ready to eat the difference as it mostly will effect them?
I think sites like Groupon damage the actual and perceived value of a private training, or Pilates session. I also think its shows insecurity on the part of the person offering it, that their service is not that great that it can be discounted. Since classes are not profitable unless they are large, I believe coupon sites act as a chance to pad out a room where gyms or yoga studios want to see if they can pick up a few random members, but for the most part, they are teaching the public that it’s always and only about price. I don’t see doctors, architects, engineers and any service-oriented, confident career person offering discounts through any such service. Why would they need to? And I know for sure that the person who got the $15 PT session is not running to their doctor with some “coupon” to get a cheap diagnosis, after getting an injury from said “lesson.”