irene-headshotThe topic of discounts, coupons and promotions has always been a hot-button topic for marketing your massage practice. In the last couple of years we’ve been introduced to online daily deal services like Groupon and Living Social.  

We know there is a lot of debate in the massage therapy world about how effective these deals are for massage therapy marketing. So, we asked Irene Diamond, an expert on the subject, to help us out today. We also want to give a friendly plug for Irene’s next Active Myofascial Therapy seminars, held September & October 2013–register at ActiveMyofascialTherapy.comEnjoy!

First, what the heck IS Groupon?

Groupon is an online promotional and marketing service that offers a “Daily Deal”. There are now hundreds of “Daily Deal” companies needing US to give them something to offer to their list of members.

These Daily Deal companies help businesses get exposure, new clients and a big cash influx. “Groupon” calls themselves “Groupon” because they provide a “Group coupon”…  they need to sell a certain number of deals before the deal “tips”, or in other words, before the people in the group can get the deal (discounted offer).

groupon-massage-3Massage deal on Groupon

livingsocialMassage deal on Living Social

“Deciding to Do a Daily Deal” is a hot topic among massage therapists.

Keep in mind: If you participate in a Daily Deal, you are not lowering your fees, you are simply offering a discount to get new clients in your door. The client knows what your standard rate is, and will know they will be charged your standard rate when they come back to see you.

Groupon helps small businesses by promoting a special deal for that individual business. Once the deal closes, the business and Groupon split the revenue that the offer brought in.

Groupon was the first company to offer this type of service through the online email/ web medium. They started back in November 2008 and have daily offers in over 140 US cities. There have been many copy-cat companies sprouting up every month. (Our wellness center gets an email or call every few days from some new Daily Deal service seeing if we want to do an offer with them!)

Pay for Performance

Any therapist who says, “I never offer discounted sessions” is actually quite mistaken.

If you are PAYING for any paid advertising, there is a cost to you associated with your advertising. The cost you incurred to get that new client will offset the payment the client gives you. This means if you charge $100/ session, and your cost to ‘Acquire’ the client was $12- you just gave a session for $88.

I am happy to ‘pay for advertising’ especially when it already resulted in a guaranteed new client.

These online promotional services are offering “Pay for Performance”. In other words, you only pay them, once the offer “runs”, and the clients have purchased their certificates for your service. The amount you pay is deducted from the total you get when they issue you a check.

Some companies will pay you one lump payment, others break it down into 3-4 payments, so they have access to more cash-flow.

It’s really simple to run a deal, since they create the artwork and write it all up for you once you have agreed on the offer you will run.

The thing I like the best about any of these services, is as the business owner, you have no upfront costs. Unlike traditional advertising, where you pay for the ad before it runs and you never know the response until it is over. With these online marketing services, there is no risk up front to you. If your offer doesn’t sell well, or doesn’t sell at all, you are not out anything. If your offer sells just a few, you only pay them on the total sales.

What’s The Catch?

Now, you’re probably saying, well this is great, I get free promotions for my massage business, and I only pay after the fact – but, of course, as in life, there are a few ‘catches’ to consider.

Since the business model is Pay for Performance, these Daily Deal companies will ask that you give them an incredibly ridiculous offer so they can sell hundreds of them.

Don’t be pressured to offer anything too low, because you won’t have enough margin to continue to run your practice. Remember, you will have to provide the service to all these clients and you certainly don’t want to be disliking the clients and regretting the entire experience. You still need to run a business! They will usually ask for a 60/40 split of revenue, with them keeping the 60%. This is negotiable! Start off asking for 90/10 in your favor and work from there. Play hard-ball.

Keep in mind, they need you as much as you need them. Massage is a really popular offering, so in this situation, we have the upper hand.

I also, encourage all of us as a whole massage industry to not go with such a low priced offer that we are shooting ourselves in the foot. Let’s please be sure to stay in the reasonable range (such as nothing less than $40 / hour) so we don’t condition the customers to only seek low-cost massages.

Loss Leader

I encourage you to think of this advertising as a loss leader.

A “loss leader” is a sales term that refers to an offer that gets clients in your door, even if you don’t make money on it, therefore, it leads clients in to your business, but at a loss.

Once you’ve got them – it’s your chance to “wow” them. Once you have provided your services, you hopefully will continue to see them again and have them refer their friends and family to you.

What To Offer

I suggest your offer be something you already have that is lower priced, such as a 30 minute session, or a package like 30 minute Swedish massage with aroma therapy and foot-bath. Total Package Value =$84.selling for $44. ($54- massage, $15 aroma therapy, and $15 foot bath) So when they come back they know your regular rate is $54 for the 30 min massage which is not much different from what they paid for their deal certificate!

grouponmassage1

5 Steps to Creating Your Daily Deal

  1. Get Sample Ideas
    Look on the websites of these online promotional services (list of a few below) and see what their past offers have been to get ideas of what you can offer.
  2. Decide how many new clients you can handle.
    There have been numerous reports on how solo and small businesses have been swamped with too much business and ended up with many disgruntled clients complaining visibly in online web reviews.
  3. Develop your offer
    One example is to set a rate for a service, such as $49. for an hour massage. Or you can do a discount on services such as $100 worth of services for $50.00.
  4. Define your fine print
    I suggest you limit the number of certificates each person may purchase, put a minimum age of person redeeming service, have a 6 month to a year expiration date. (The longer the period they can redeem, the more you will sell, but also, the more certificates that won’t be redeemed (but you still got paid), and if you live in an area with tourists, put a restriction to local residents only, and the hours they can redeem certificates.
  5. Determine your upsell
    Once you have the new client in the door, what will you do to keep them coming back to you?

You absolutely need to WOW them! I suggest you come up with a really irresistible offer that they can’t help but say yes to! (I’m not talking about discounts only)

Remember, these people will continue to get new offers each day in their email box, so your offer has to stop them for just waiting for the next ‘good massage offer’ because you just blew them away with your service. It’s OK to compete on price to get them in the door – but keep them with your skills, service, ambiance, etc…

Example

Take a look at what this smart therapist did:

Ben Crabtree from San Antonio, Texas had an offer on Groupon and sold 359 certificates! He knew he would be having a slew of calls, so he posted a page on his website to answer questions so he could focus on providing the massage. This link will bring you to his “FAQ” page (Frequently Asked Questions) http://massagebyben.com

If you’re considering working with one of these services:
Here are a few companies to look into: GrouponLiving SocialYou Swoop, Two Buck Duck, Deal Chicken, Eversave.com.

Finally, I have a few questions for you:

  1. Will you do a promotion through one of these companies?
  2. HAVE you done a promotion with one already? (If so, what was your response and reaction)
  3. What will your offer be?

Irene Diamond, R.T., is an energetic educator, public speaker, and business mentor dubbed “Therapist’s Tour Guide To Business Success”. She is the founder of the rehabilitation technique, Active Myofascial Therapy ~ The Diamond Method and creator of the world-renown on-line business resource, SuccessfulMassageTherapist.org. Irene is honored to be inducted into the Massage World Hall of Fame in 2013 for recognition of her contribution to the massage industry in business and rehabilitation technique. 

Irene’s next Active Myofascial Therapy seminars will be held September & October 2013 and therapists can register at ActiveMyofascialTherapy.com.

Request your FREE audio Success CD by going to www.MassageSuccess.org  and get on-going success tools and tips at FaceBook.com/TherapySuccess

 

Comments from original Massamio post:

We have done several Groupons successfully. In the article above, it suggests to put a minimum age and to say local clients only. However, when you are that picky and the public purchases the groupon anyway without reading the fine print, you stand the HUGE risk of having an awful review on YELP with dissatisfied people who cannot use their Groupon or ask them for a refund. Trust me…it is not worth it to have that happen. Just serve them as you would any other Groupon customer with high level customer service so your reviews are wonderful. — Posted @ Monday, July 29, 2013 11:03 AM by Mikki

Hi Mikki,  Of course if a customer buys a certificate who doesn’t meet the requirements in the ‘fine print” the therapist should make an educated business decision to honor it or not.  However, the business owner has every right to stipulate which clients they are offering the deal to, therefore designing their dream practice of dream clients. — Posted @ Monday, July 29, 2013 3:20 PM by Irene Diamond, RT

You should caution MT in WA state, that to do a promotion like this is NOT legal. LMPs are licensed health care providers and this is considered a “kick back”! — Posted @ Monday, July 29, 2013 4:15 PM by Marybeth Berney

There are plenty of negatives to using Groupon or Living Social. I appreciate that you give an easy overview, but for therapists that are just starting out-or are in a position where they are relying on Groupon or LS for “business” I think that it is critical to mention the negatives. Particularly the therapists that are new to the career and are in the panic stage, which a lot of new grads are. I believe that Groupon, Living Social (and the like) are the potential death of small business. From the risk of not being able to PHYSICALLY meet the demands, to not being able to satisfy the needs of the client due to overbooking and time constraints-all the way to that negative Yelp review from the client(s) you weren’t able to see for a month, because you were so busy doing those $15 massages. And then to expect the therapist to WOW the new client with exhausted hands and an empty bank account (I know…slightly dramatic) -well, to me it is a recipe for potential disaster. It needs to be mentioned that most people that buy a Groupon aren’t shopping for the lifetime therapist-but the deal, therefore the client isn’t likely to be retained. There are a lot of articles written regarding the negative effects that small businesses are left to deal with after Groupon, etc has left. I recommend that your readers do some reading regarding this as well, so they are informed in a balanced way. — Posted @ Monday, July 29, 2013 7:37 PM by Sarah Cafiero

For your readers, I recommend typing “groupon death of a small business” into your search engine. — Posted @ Monday, July 29, 2013 7:42 PM by Sarah Cafiero

Hi Marybeth,  You are correct, there are many state laws (and for our international readers, many country laws) that will affect a therapist’s ability to offer these daily deals.  It is always best to do your due diligence prior to any big business decision.  And Sarah, Yep- a bit dramatic, but point well-taken. Therapist’s NEED to know what they are able to handle! It does get crazy with the traffic of not only providing the massages, but handling the phones, laundry, etc.  A deal can be capped, so therapist should only sell what they can service.  AND, it can and should be noted in the offer how appointments are to be scheduled, and a realistic expectation of when they can be redeemed.  For all the deals we’ve done, every time it has resulted with more ‘regular’ loyal clients (who return again) than those who came in for a single ‘cheap’ deal and never to be seen again.  That is why when the time is right, we will offer another deal, where we select EXACTLY the client we want, for the EXACT price we want. (Not a boring, cheap $39/massage deal, more like $79/Stress Buster plus Diamond Hot packs, plus membership fee waived into our club.)   Bottom line, I’d rather GET paid to have a new client experience us than HAVE to pay to advertize it.  — Posted @ Monday, July 29, 2013 8:22 PM by Irene Diamond, RT

Yes, I get it. I just find myself concerned by it as a small business owner and as someone that interacts with new graduates often. The last I heard, Groupon had a minimum that was unreasonable to me. Yes, they have a cap-but the cap is still high. They aren’t transparent on their site, so I can’t give you the current correct number, but I know it was at least 300, possibly 500. As an independent contractor, this type of offer would hurt, not help me. I would be concerned for my reputation and physical longevity. So, as a new grad-the need to build a solid reputation and to grow into the physicality that being therapist requires is even greater. Maybe a follow up post to your really informative pro post would be helpful? — Posted @ Monday, July 29, 2013 9:11 PM by Sarah Cafiero

When I just get my licensed as MT I answer several ads of spas looking for mt and guess what…all of them were looking for new therapist to work on call to provide grupon, SL and chicken deals massage for $3,$4 0r $7.00 per massage promising that clients will come back for more. in my experience I did those deals in more than 3 locations and the return customers were “0” none. people who are looking for discounts don’t care how good or bad the massage is they just don’t want to pay more. — Posted @ Tuesday, July 30, 2013 8:55 AM by Juan

Not only does groupon not get you repeat clients, it actually can jeopardize your license, in NY where I am licensed — Posted @ Friday, August 02, 2013 7:56 PM by Sharon Perry-Ferrari

As Sharon stated, some states have laws regarding 3rd party reimbursement and discounting services. Check with your licensing board or read your state laws regarding such services. I have had great success using Groupon. I expect to see the “Grouponers”, hitting up every deal they can find with the intent of never using my services again. I have also captured a rather high percentage of return business, some who are scheduling appointments every 2-3 weeks. Being prepared for the onslaught and deciding how many coupon clients one sees each week is important in maintaining a good cash flow for your business, and putting the check from Groupon into savings assured me that I would have cash if needed. That check is still sitting in savings 8 months later.   Groupon has frankly been my best marketing expense in my 15 years as an LMT. Others will disagree with using one of these tools, but I have been quite happy with the returns. I bargained for my percentage, set the maximum number of purchases, and now agree to selling a few more each month to new users of Groupon’s system (no one returning a second time with another deal). — Posted @ Thursday, August 08, 2013 6:53 PM by Mike Blackmore

Whether people find you through a newspaper ad, online, Groupon or a referral from a friend – almost everyone is looking for a good deal.  Please remember, daily deal sites are not the enemy, they are merely a vehicle to get your name out to many people at once, with ZERO up-front costs to you.  If it doesn’t fit your biz model, don’t do it. But for therapists who know how to use it to their advantage, it can literally make or save their business if done right.  (I’ve worked with tons of therapists who have said it was the best thing they’ve done because we worked on the strategy of retaining the client once they came in.)  By the way – I found my hair stylist and my dentist thru a daily deal- tried them out first at a discount and have been with them now for a while… so it obviously worked for them to get me at a discount and now I pay full price.)  I agree, it is not for every biz owner, but if done well, offering a Daily Deal can be a HUGE client generator!  — Posted @ Friday, August 09, 2013 10:47 AM by Irene Diamond, RT

LivingSocial was definitely a much better experience than Groupon. I work with a beauty brand and can’t tell you how frustrating it was to work with Groupon. From their response time to payment, and representing your product. Never again!   The rep we work with at LivingSocial is amazing!!! And the customer service is on point. Anytime you call with any question or need help with a customer. So much easier and less stressful.   We love LivingSocial! — Posted @ Sunday, August 11, 2013 9:16 PM by Cami

As practicing therapist in NYS, you cannot split fees for payment with someone who is not a therapist. Also, it does ruin the going local rate. Licensed therapists should reconsider going this route as it does cheapen the service for the rest of us. I provide qualified, therapeutic health and well-being. I don’t feel I should be considered a gimmick. — Posted @ Thursday, September 26, 2013 4:24 PM by Allie

Although the Group buying market is in a great deal, it’s really a profitable business. I actually run group buying business website using deals software. I liked my deal websites which is customized with all Groupon like functions. — Posted @ Monday, November 04, 2013 6:50 AM by Melvin Rajiv

Keep in mind that about 98% of the people that purchase massage on a deal site are bargain hunters and are NOT looking for a quality therapist to come back to. Yes, you will get repeat customers but the majority of people will not come back to you unless you offer a deal on their favorite deal site — Posted @ Thursday, March 06, 2014 6:38 PM by ABA

ABA- Actually we have found the opposite to be true (and so have many of my coaching client therapists who have offered deals.)  When positioned correctly in the ad, handled correctly in the office and offered them a ‘no- brainer’ to the level of service they receive – it can result in a group of solid, passionate return clients who have *finally* found a service provider they love.  (I found my hair stylist and my dentist, both thru deals and keep returning)  Good luck to all who do a deal!  — Posted @ Thursday, March 06, 2014 6:58 PM by Irene Diamond