SITUATION: I have some friends who have run LivingSocial and Groupon deals to bring in new customers. Are they a good way to drive traffic? Do the companies take a cut?
SITUATION REVIEW: There are many avenues for salon or spas to promote and drive new business. With more and more consumers shopping online, companies like Groupon and LivingSocial target these consumers. However, just like any other marketing strategy, you must take into consideration the pros and cons for your business.
SOLUTION: I think you will agree with me that everyone loves to get a good deal. Companies like Groupon and LivingSocial do exactly that. There’s no doubt that these types of deals can drive more business to your salon/spa, but at what price? Let’s review some of the common pros and cons to online discounts.
Brand awareness- The primary benefit of online shopping sites such as Groupon and/or LivingSocial is to increase your brand awareness. This form of marketing can provide mass exposure, perhaps to a target market that is not familiar with your business.
Great way to move extra inventory- If you find your inventory room full of extra inventory, this can be an effective way to sell through and get rid of extra inventory that’s taking up space and generate extra revenue.
Opportunity to build new customer relationships- Now that these new customers have come to your salon or spa, it is the perfect opportunity to turn them into repeat customers and create a lasting customer relationship. It’s your team’s job is to keep them coming back!
Fees- Take into consideration the upfront fees and marketing fees that these online marketing companies charge to run your campaign. Typically, you will find these companies charge a marketing fee to place your ad and often you will be charged a percentage of the revenue you earn from the promotion.
An influx of traffic- Offering discount deals can bring in more customers, however, make certain your business is well equipped to handle a surge of new customers.
Lack of brand loyalty- Keep in mind that plenty of customers that take advantage of online discounts characteristically have no brand loyalty. These customers may be a one-time visit to your salon or spa.
GROWTH OPPORTUNITY: There’s no doubt that developing an effective marketing campaign is critical to growing your business. Before you jump in and commit to incorporating an online discount marketing companies, do your homework and read the fine print in the terms and conditions before making your final business decision.
Photo: Shutterstock | dreamerve
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Patti Wanamaker brings 21 years of experience to the Milady team where she currently serves as an Implementation and Training Specialist. Her intimate understanding of the salon, school, and beauty industry comes from 18 years of hands-on experience as a multi-faceted training specialist, including 8 years of salon and spa ownership of 3 salons with annual sales of $5 million. Her experience in all 3 areas of our industry allows her to think outside the box and develop innovative training that inspires and empowers beauty industry professionals.
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