Every day I get e-mails offering me discounts on items and services...Mamapedia, Schwaggle, Yelp, Social Living, Facebook and the biggie...GROUPON. Everyone seems to be putting together their own version of the discount group deal. The basic premise is that the company offers your service or item at a HUGE discount, but you are e-mailed to their entire mailing list and you, hopefully, come out with new customers. The catch is that, after discounting your product heavily, they take half as their fee, leaving you with some small percentage of what you would normally charge.
I know a pole studio that received an offer from Groupon last year. Everyone was so excited. In our eyes, it meant they were a reputable company. We thought the studio might get 30, 40, maybe 50 new students out of it. Clearly, we understood that not EVERY person who did the Groupon would continue on as a student. But even if 10 girls stayed on, that would be a success!
Groupon offered a month of classes at $49 (US dollars), which means the studio received $24.50. That breaks down to around $6 per person per class. By the end of the day, over 300 people had signed up. The studio is a fairly small operation -- just two instructors. It was a little overwhelming (but exciting) in the beginning. Calls started coming in immediately and the studio owner was tasked with finding space to fit all of the new students into classes appropriate for their beginner level.
If a normal student pays $120 per month for four pole classes, each class costs $30. If six girls are in a class, the studio makes $180 for each 75 minute class. For the Groupon classes, even if they required girls to share a pole, meaning there would be 12 girls in a class, at $6 per class, the studio makes $72. Twice the work for half the pay.
Another issue is that people had up to a year to use their Groupon. They were flooded in the beginning. This Groupon expires in November 2011 and there is a large number of people who have not turned in their certificate. This means when the end draws near, they may be flooded again.
Although I know the studio appreciated the experience, and met some wonderful people, I know they would do a few things differently if they did another Groupon listing. For one thing, they would not want to leave the offer open for an entire year. However, they did gain some new students, and that's what the Groupon is really about -- being able to maintain new students/customers.
In the end, for a company to decide if Groupon (or any other group deal) is right for them, they really have to decide if the end result will be enough new repeat customers. I know some people who just snap up these deals and will never return to a store/company again, regardless of the service or product offered. Make sure your studio is ready to deal with the onslaught and your studio is adept at selling your classes in order to maintain some of those customers after the deal is done.
Photo credit: White outfit Lori Myers at Twirly Girls. Black outfit Rita at Twirly Girls. Black bikini is Shelly Lamb at Twirly Girls. All photographed by Liquidpulp Photography (www.liquidpulp.com).