Have you tried using a daily deal site to bring in new business? Revenue from online daily deal and discounts sites including Groupon and LivingSocial will top $2.67 billion in 2011, according to Local Offer Network, Inc. This is up 138% from 2010, which saw a measly $1.12 billion in 2010. What does that mean for your salon or spa business? It means you can’t ignore this phenomenon; even if you don’t trial a daily deal yourself.
If you are considering a collective buying service like Groupon or LivingSocial, make sure to consider the following do’s and don’ts of this type of promotion.
Do: Consider this to attract new business
This type of service works well when you need to introduce your brand, your new employee or your new service to a LOT of new clients.
Don’t: Use this service just to be busier.
If you are losing more clients than you bring in, don’t try this service until you solve your retention problems. Do you know your new client retention versus your existing client retention?
Do: Have a specific objective and measure your outcome.
Know what you want to achieve and have a system in place to measure your results. Are you trying to launch a new massage service? Are you trying to build the column of a new, junior stylist? Are you opening a new location and need to say ‘hi’ to the local area? Know what you’re after, set a realistic goal for the outcome and measure it!
Don’t: Expect to make a load of cash on the initial visit.
This is a loss leader promotion. Set your expectation correctly as you are doing a lot of low-revenue services in order to get the opportunity to retain a certain percentage of them to spend money on their future visits.
Don’t: Forget to brief your team on the strategy.
Your team needs to be onboard with this to ‘wow’ your new clients and get the retention numbers or up-sell results you’re after.
Do: Speak to your team about a fair approach to remuneration on the service.
When discounting services, you should discuss how this will impact what the business takes a hit on and what the employee is prepared to take. Be prepared to animate and make it fun so they understand the gain as well as the loss. Give them the opportunity to disagree so you can handle any objections and come to an agreement that everyone can be happy with.
Do: Be specific about what your inclusions/exclusions are.
The last thing you need is for one of your daily deal clients to read between the lines and try to take advantage of something omitted. For example, how many visits can this be used on? Is there a certain day of week or time of day or employee experience level that this is valid for? Think about all the details and be strategic about it – remember you control this exercise – so do so!
Do: Think about how to get them back in.
Make sure to have a clever, and thorough, strategy for ensuring these clients come back in. The more they see you, the more they’ll love you. For example, new client packs, second visit promotions and a communications plan to ensure you don’t lose control when they leave the salon.
Don’t: Treat your clients like a cheapskate
Make sure that you give the same AMAZING service that you give all your clients so they see what a regular client would get in your business and why they should come back.
Do: Tighten up your first client experience activities
Step up your game as if it’s the most important interview of your life and get everyone in the game. For example, think of things like using a separate color cape for new clients so that everyone knows to stop and say ‘hi’ and your manager can come by and confirm satisfaction, etc.
Don’t: Use this when staffing isn’t available.
When you first sell your daily deal you’ll have a wave of new bookings and then history has shown that it tapers off until a final spike before expiration. Make sure you have enough staff both to do the services but also to take care of a full house.
Do: Manage influx of appointments with alternative systems, like online booking.
Consider implementing automated systems prior to launching these deals so that you can offer a professional service without overstaffing. Things like online booking, text or email confirmations, client surveys/reviews, etc.
Do: Offer up-sells during the appointment.
Plan special up-sells and promotions that you can offer at the time of their appointment. Just because the initial service was discounted doesn’t mean they won’t spend more cash on services during their visit.
Do: Collect their information.
Just like with any new client, you must always collect their information and store it where it can be useful for future marketing.
Do: Find out what their thoughts and intentions are.
Survey your deal clients to find out their experience and understand them as buyers. This will be useful in understanding their intentions and also makes a good impression with them about your business’ integrity.
Don’t: Use this if your target audience isn’t using this service.
Not everyone is onboard with these deals, and perhaps your audience is Group-off not Groupon. Check the deal sites demographic stats to see if they’re targeting your audience first.