Let's Make A Deal

Cash in on the rise of online daily deal sites by keeping these 10 helpful tips—and common pitfalls—in mind.

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Today’s freshest and most viral marketing strategy involves a concept that didn’t even exist a few years ago: social-local media. With the onslaught of coupon websites such as Groupon and LivingSocial, spa-goers are seeking—and getting—the best deals in town. And thanks to the power of community (deals are only guaranteed if a certain number of buyers jump on board before the offers expire), hordes of spa clients are snatching up local discounts of up to 90% off popular treatments such as waxing, massages and facials.
But it’s not always easy to determine if—and when—taking part in these steep discounts will ultimately benefit you as a day spa owner, especially given that most daily deal services retain up to 50% of all coupon sales. “Plenty of spa owners don’t understand the numbers well enough to be able to effectively analyze the true cost of participating in these campaigns,” says Peggy Wynne Borgman, president of consulting firm Preston Wynne, Inc. (wynnebusiness.com).
Online social deal services can be supertools for generating sales; however, the spa owner has to do his or her research first. “Many buyers are just looking for the best deal and won’t return without a sharp discount,” says Felicia Brown, founder of industry marketing resource Spalutions! (spalutions.com). “You have to ensure the coupon reaches your target audience, and that it’s thoroughly planned to result in the best retention rate and highest sales possible.”
Ready to make a deal? Just be sure to follow these guidelines to increase the odds of your spa’s success in today’s capricious sea of social discounting.

1. Choose a reputable site.
“Most deal sites are conducive to spas; however, you must shop carefully, as each one has different requirements, costs and parameters,” advises Larry Oskin, president of Marketing Solutions, Inc. (mktgsols.com). Look at the site’s “recent deals” section, where you can see past deals and the businesses that offered them, and then talk with fellow spa owners who’ve completed a promotion.

2. Limit the number of coupons sold.
Make sure you can handle the sudden influx of deal-seekers. “If a promotion isn’t carefully designed to match your spa’s capability, it has the potential to draw a too-small or too-large audience—both of which are undesirable,” Brown says. “If you sell 500 manicure/pedicure packages, but only have one station, you may not even be able to redeem them all before they expire. It also affects your full price–paying clients’ ability to book an appointment, which hurts your bottom line.”

3. Limit the dollar value.
It’s unwise to offer expensive deal packages. It costs you more, and it rarely grabs the client who’s scouting for cheap finds. A $20 deal that provides $40 worth of services will cost a lot less money—and sell better—than a $200 deal at a $400 value, according to Barry Nicholson, co-owner of The Ultimate Spa Marketing System (spamarketingsystem.com).

4. Create a special package deal.
Consider putting together a package for your social deal that previews your spa’s offerings but isn’t currently drawing regular clients. This way, if you have a service or equipment that’s underutilized, it can get some exposure.

5. Set redemption parameters.
Be sure to clearly state deal limits, such as how many coupons can be redeemed per visit—and times when they can’t be used. Restrict use during high traffic times, such as holidays and weekends. “Spread these clients out during days you’re not busy,” suggests Ron Kustek, co-owner of Le Petite Retreat Day Spa (lprdayspa.com) in Los Angeles. “You don’t want to clog Saturdays or other busy times with so many coupon redeemers that you’re unable to accommodate full-price clients.”

6. Get ready for the phone to ring.
Prepare your front desk staff for the barrage of calls that will inevitably follow the broadcast of your promotion. You may need to hire extra support just to man the phones during the first week, as coupon-buyers typically try to schedule an appointment immediately. If your staff is ill-prepared, or perceived as rude over the phone, your spa risks receiving negative feedback on Yelp and Citysearch—before clients have even set foot in the door.

7. Train staff to upsell and cross-sell.
Prepare an upsell strategy to offer to every deal redeemer. “If you run a 30-minute Swedish massage as your promotion, offer an upgrade to a stone massage for only X-dollars more,” Nicholson says. Don’t forget retail products. Therapists should already be trained to look for problem areas during treatments. If a guest suffers from, say, excessively dry skin, have your therapist suggest a helpful product. “Be careful not to come off as pushy though,” Nicholson says. “If the client says ‘no,’ just smile and move on.”

8. Don’t cut staff pay.
If you make employees share the discount by taking lower pay or commission, you may end up with morale mayhem. “Giving employees ‘discounted’ compensation may be okay once in a while, but when it’s a habit, you drive away quality staff,” Wynne says. And frustrated staff translates to frustrated clients. “Reduce compensation, and an employee may do a less than stellar job, resulting in an unhappy, non-returning client,” says Dori Soukup, CEO of InSPAration Management (insparationmanagement.com). “In this scenario, everybody loses.”

9. Get those digits.
Before your new client walks out the door, get his or her name, address, email, birthday and anniversary, along with permission to send text messages. “Not getting all this information seriously hampers your ability to market to them in the future,” Nicholson says.

10. Get in touch.
Send new guests a thank-you note shortly after the visit, along with a special offer that expires in 30 days. Then, send monthly newsletters, birthday cards, referral enticements and other special offers throughout the year. “If you don’t have a system in place to get online coupon clients to come back, and refer their friends, you need to get one together immediately,” Nicholson says. “If deal-buying guests don’t return, you’ve lost money on them.” You can even reward them for “liking” you on Facebook right then and there at the front desk as they check out. “It could be with something as simple as a free sample you’ve gotten from a manufacturer,” Nicholson adds.

Online social coupon promotions can be great spa marketing tools when carried out with care and consideration. But before you sign up with a deal site, make sure your team is ready to shine. “Discuss the promotion with your staff first, especially if it’ll require them to alter the way they work, or affect their pay,” Brown says. “They must be willing participants; otherwise, they may not do their best with the new clients, which can do a lot of damage to company morale, client retention and your reputation.”

Online social deal sites use the power of collective bargaining to offer steep savings for consumers, while promising spectacular sales to participating merchants. Below are some of the most prevalent group buying sites across the United States, according to muse.com.
BuyWithMe, buywithme.com
DailyCandy, dailycandy.com
Deal Mob, dealmob.com
DealOn, dealon.com
Dealster, dealster.com
Gilt Group, gilt.com
Groupon, groupon.com
LivingSocial, livingsocial.com
SocialBuy, socialbuy.com
BoomTime Deals from SpaBoom, spaboom.com/group-deals-for-spas
Spreets, spreets.com
Tippr, tippr.com
TravelZoo Local Deals, travelzoo.com/local-deals
WagJag, wagjag.com