WEB EXCLUSIVE: Social Deal Participation: Point and Counterpoint

Check out spa owners' cases for and against these steeply discounted offerings.

ThinkStock

It’s rare to open your inbox these days without a spa deal popping up, advertising a ridiculously low offer for a massage, wrap, wax or any other spa experience. We know a lot of spas are using Groupon, Living Social, Bloomspot, Yelp and other discount deal sites, but we couldn’t help wondering, are they working out well for these spa owners or wearing them down? Here, two pros provide a “point and counterpoint” argument for why steep discounting can be a major boon—and also a nightmare.

Point: Love ‘Em

When Lizabeth Kristiansen, owner of Elements7 Day Spa in Hales Corners, Wisconsin, sought to drum up some business for her waxing offerings during a slow period at the spa, she turned to Living Social to create an offer for 50% off her Brazilian wax services.

“It was the best thing I ever did for my business,” says Kristiansen. “I ended up with a great client retention rate. Plus, what I sold in retail to Living Social redeemers more then made up for the service price cut.”

Kristiansen is especially appreciative of the buzz this promo generated. “As a solo, dual-license professional, I couldn’t afford to pay out of pocket for all the marketing provided by Living Social,” she says. “So when it came time to give them their cut, I was more then happy to do so.”

Want to give it a try? Kristiansen advises spa owners to research available social deal sites to help determine which one is best suited to their goals. How much of your immediate revenue can you afford to part with? How involved do you want the company to be in managing your own promotion? Kristiansen went with Living Social because of what she called their “stellar" customer service. "I had a personal sales rep hold my hand throughout the process,” she says. “Plus, they only took 40% of each voucher’s sales, whereas some others take 50%.”

As for achieving the all-important coup d’état of social deals—client retention—Kristiansen devised a targeted plan ahead of time: “I gave each new guest a come-back offer in the form of a gift certificate, which has higher perceived value than a coupon,” she explains. “This second discount was worth it, because with repeat exposure to your spa and services, clients become more comfortable, trusting and loyal.” However, Kristiansen cautions owners seeking to create similar offers to “avoid letting existing clients know about the deal, because you want just new guests to use it.”

Keep in mind, a large part of your success with social deals lies in the services you choose to offer. “Selecting a less labor-intensive service, with a fast clean-up and turnaround, was key,” Kristiansen says, “because I knew I’d be bombarded with vouchers.”

Kristiansen reports that she plans to run the same Living Social Brazilian wax promotion again soon.

Counterpoint: Leave ‘Em

Face to Face NYC owner Enrique Ramirez has tried several steep discount deals. The spa worked with Yelp to offer waxing and facial services for 60% off during last March’s Wellness Week, recently took 40% off all of its services through Lifebooker.com, and promoted facials and body scrubs for $50 during Spring Spa Week. None went particularly well. “The last time Groupon and Travelzoo came a-callin’ with similar terms and conditions, I said, ‘No thanks,’ ” Ramirez reports. And here’s why:

“We did not anticipate the amount of traffic that these deals would bring upon us,” he admits. “We became so busy that it almost felt as if we had turned into a spa factory, which runs counter to our mission of offering each of our clients a personalized, special and quality spa experience.”

The goals of retaining new clients and building brand awareness weren’t met, either. “Although we serviced many new clients, only occasionally would anyone return for additional services at our regular cost,” Ramirez says. He doesn’t consider itinerant deal-seekers ideal clients, either. “With the current state of our economy, many consumers depend on deals and discounts to look and feel their best, and I totally understand it,” he says. “But participating in these deals creates somewhat of a challenge for a spa trying to survive in Manhattan.”

Deal participation also resulted in some morale issues at Face to Face. “These deals were so discounted that spa technicians' commissions were extremely low,” Ramirez explains, “and they started to feel overworked, demoralized and somewhat resentful toward me.”

All that said, though, Ramirez reports that he might consider trying deal services again, with different terms and conditions. For example, “If the spa deal could only be redeemed during a single weekend or slow week, it might take less of a toll on our facility,” he explains. “And the required discount would have to be less steep—perhaps 20% or 30% instead of the required 50% - 60%.”

Do you have a discount site story—good or bad—to share? Please post it in the comment section below. And check out DAYSPA’s ten tips for mastering the art of social deal participation!

Carrie Borzillo is a freelance journalist and author based in Los Angeles.