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To discount or not to discount?

Mark Demicoli  20 March 2011 02:39:25 AM
Many of us have seen it.  A whole crop of new websites have emerged that let you create special deals with the promise of increased sales.  Essentially, what we have here is a new breed of high-speed marketers who are using the power of the internet and social networking very effectively to sell products and services on your behalf at discounted rates, and take a commission from the proceeds.

Anecdotally, we've seen many ClickBook service providers achieving 'booked out' status thanks to these services.  Here are a few of the more popular sites: (Australia) (Australia)

Are you using these services? What has your experience been?

1Brenda Bentley  17/08/11 7:43:42 PM  Groupon

I ran a deal on groupon - I'm not five month into it and still have a couple of months ahead of me. There are pros and cons...

Pros: It exposed my services to a market I didn't otherwise have access to on a massive scale. I get most of my clients through word of mouth and there's been lots of that through this due to this. Which is what it is all about.

Cons: People want a good deal and they want it NOW. But it doesn't work that way. You will have to wait a month or two to have your session as I cannot allocate 100% of my time to special offers - this leads to angst telephone and emails. Some of them are quite demanding and rude about it. Which is such a bummer to deal with.

I'm over subscribed! I feel groupon sold too many of these and didn't cap the number they sold. Also, you don't get the vet the client in advance for their suitability for this type of therapy (psychotherapy / hypnotherapy)... This has lead to problems with unstable individuals making demands.

They stick you with paying the VAT and although they split the takings 50-50 they don't split the VAT. So you get 30% - after room hire and other overheads, it breaks even for me (no profit). Thank goodness for the referrals - also I have run an extended deal - which 100% goes to me and has made the difference in this campaign to work so I highly recommend you do you own deal once you have exposure.

Would I do it again? NO WAY! ;-)

2Linda  23/07/11 8:58:39 AM  discounts

You can't ALL be wrong....

They are what I call "coupon hoppers" I have done three different discount programs and found what you say to be true. I work myself into the ground (I am NOT young) for a price that is only a fraction of what I'm worth. I am going broke, can't pay my bills, and living at poverty level -- And I am a 5-diamond spa-trained therapist, who delivers a high-end high quality massage in a lovely studio with high overhead. I am finding myself working to pay the overhead and growing waaaaaay too slowly to keep up with supporting myself.

The one discount that has worked for me is the "introductory massage" with a discount, and then they get to keep that price as long as they re-book before they leave. This is a price level that I am happy with anyway since I tend to get great tips, but I don't want to lower my rate. As long as they think they are getting a "deal" it encourages them to return, and I don't want to tract any kind of packages at this time.

These programs have cheapened the professional services that a Massage Therapist offers after all that education, licensing, continuing ed, and overhead. Let's all support each other and not the pockets of the coupon people.

No more carrots dangling under my nose. The referral incentive or frequent client ideas are good ones, but no more highly discounted programs for me.

3Gillian  14/07/11 9:27:11 PM  re: Deal websites

As Breanna said:

She "spent thousands of dollars over the years on various different marketing campaigns which have all been 'a risk' and netted an end result of practically nothing."

All these fad deal sites give net zero result for us after we have worked our butts off and exhausted ourselves totally for sixpence reward, and then these customers just move on to the next cheap deal elsewhere. Locusts. We have prostituted ourselves for no gain; these deal companies are presenting us as severely discounted commodities which are devaluing us, and destroying our businesses. Therefore we should not be participating and lining their pockets- they are making the major percentage that clients should be paying to us; because we're the ones doing the hard work. And do not forget that the cheapies never come back to pay full price, and genuine customers start expecting the price to go down too, and start looking for someone cheaper. So our businesses start to head into the ground and we have nothing left. They won't be happy until we are charging the same rate as you would get in a village in India or China, they can live on a dollar a day. Funny how they are not asking doctors or lawyers to jump on these campaigns....they would get laughed to scorn. That's what we should do too.

I did try a 1 month stint with MeTime vouchers; which allows me to try to get the customer to upgrade from a half hr free to one hour, for $25. About 90% agree to take this up, which is better than nothing. About 40% take the 2nd treatment for 50% off, it means I get a little more...and about 20% take the 3rd for 25% off, which is finally getting nearer the fee I am willing and happy to discount.. So far, after 6 months, Zero % have come back for a full priced massage. Even though I stopped participating in the deal 5 months ago, I am still getting people redeeming vouchers even now. Me Time insinuated to me that if I am doing a good service then people will come back! Well that just isn't the way it is! I am a professional and all my treatments are first class - I have been 30 years in the business and know how to deliver a quality service.

I will never do any of these "deals" again, and I suggest to anyone else reading this not to do it in the first place, if they value themselves or their business.

4dailydealtime  06/07/11 2:00:59 PM  Discount Deals

Daily Deal Time is the First Stop for New Nationwide Discount Shopping Website which deals with daily restaurant deals, deals sites and daily discount deals.

5Breanna Iwaszko  02/04/11 3:02:18 PM  deals websites

Contrary to what seems like the popular opinion here, I actually think these websites are a good idea. When I first started out (over 11years ago) I built my business by attending festivals monthly and advertising my services in person - attracting people to my place of business through heavily discounted and free sessions. It took a long time, but now my business is very solidly running on word of mouth referrals and has sustained it's momentum through 3 sets of maternity leave.

I've also spent thousands of dollars over the years on various different marketing campaigns which have all been 'a risk' and netted an end result of practically nothing.

In my opinion, the % of the fee that they keep is simply a marketing expense. Sure, you will get heaps of clients that are just following the 'deal' - but in most circumstances they will be from your local area and may return or tell someone else about you (if your service is good and worth telling someone about). Absolutely you will spend heaps of time and energy working for practically nothing, but in the meantime you have created a whole lot of momentum and energy around your business and if you are smart about your client service operation you will market yourself well and sell your client on the need to return to your business rather then go elsewhere.

In fact, this is what you should be doing anyway. There is always going to be another practitioner or company supplying the same product or service that you do - it's up to you to demonstrate the difference that you have and sell your customer on why they would be best to return to you for that service.

Ultimately, these websites drive a whole bunch of clients through your door and what you do with that opportunity is completely up to you.

Personally, I wouldn't choose to play the 'victim' role by feeling over-run with potential clients.

The biggest mistake I see in the service industry, particularly with new practitioners that are just starting out, is an expectation that they will qualify and set up shop and then they will just be busy with all the hundreds of clients that will walk through their door. That seems like an unrealistic expectation to me.

By they way Mark, I think your idea of having a 'specials' day or time slot is a great idea.

6Justine Robinson  29/03/11 9:54:23 AM  one day deals

This topic couldn't have come at a better time honestly. I've been a groupon member for a few months now, and have seen a few of my Therapist friends run ads in the past 2 months.

It makes me want to jump on the bandwaggon! LOL!

But at the same time, I've always been a firm believer in pricing my services fairly, and that any sort of discounts will only bring drive through customers.

When I first started I offered discounts to first time guests, which I still do, but have many fewer "first timers" now.

Instead of continuing deep discounts, I have instituted a refferal, and regular reward program. These have served me very well, and I will build on them in the future for sure.

Mark~ I think allowing your subscribers to "define"their own discounts through clickbook could be very valuable. For instance, I have heard of therapists running discounts for seniors or military members on their known slow days. If your system could tell us when those were (without us having to manually go through and figure it out) that would be fantastic!

That type of service ( telling the therapist/ practioner when they were slowest) would also benefit those of us who may want to be able to commit to a second job because then we would know which days to keep, and which would be ok to do other things.

7Gerald Lopez  28/03/11 3:40:19 PM  One day deals

I did some deals with and I sold about 300 deals which kept me massaging through Christmas and New Year, until now!

Yes it brought in some badly needed cash. Fortunately I am strong and healthy, but have sometimes faded after three straight days of 5-7 massages (mainly 90 mins)! When I am tired I am not as satisfied with my work, and find it harder to get rebookings.

Someone from Australia contacted me about participating in their NZ launch, but I have decided against it. They insist on 50% discount, then take 50% of what's left! I think these sites are getting greedy and cashing in on desperate businesses.

Like Vonna and Kevin say, massage is a profession, and a physically demanding one. Heavy discounting is something you need to think about very carefully.

8Mark Demicoli  24/03/11 10:35:50 PM  Great feedback

This is some REALLY interesting feedback and corroborates to a great degree what I've been thinking.

In a nutshell, it's early days for these kinds of services. The promise of more customers it seems, does not equate necessarily to Better Business.

On the other hand, what is being tapped is the internet's power to market services. Thinking creatively, what if, for example, your quite mornings or afternoons, were automatically discounted based on certain rules that you define?

What if, indeed, your booking system could determine automatically when you have slow periods and let your clients know that they can come in for a discount which you define? Ideas ideas...

9Anita Hunt  24/03/11 5:18:19 PM  discounted Online sites

They are just like coles and woolworthes they don't care if they make the business go broke all they care is about now! and the money!! They bring they industry down, every body likes a good deal but the deals that they propose don't even cover the product, time and wages so how will you make any money from that and then they take there percentage. All they do is shoot of an email and take the money. People that get on those sites are just looking for deals and will not be loyal clients, as these online sites suggest. I example of deals,com wanted my business to do a teeth whitening package that is worth $320 for a full PROFESSIONAL session not 1/2 price not even $99.00 and don't forget they take 30% in that case they actually wanted me to do it lower as another company had done a deal for $39.00 for a 30 minute session, that is not even going to cover the product. Tell me how this is a good thing for all businesses we are not valuing our services, our selves and being true to the industry. This is just a price war like any other!! and business are shutting down because of these sites, don't get me wrong its nice to have a bargain but not to that extent!!! I don't think we should support these online sites their the only ones that win!!! i have heard of business that had to shut their doors because of these deals.

10Anita Hunt  24/03/11 3:58:19 PM  discount

11Angelita Houser  24/03/11 2:02:22 PM  Discount Rates

As a new therapist there are pros and cons to doing these deals. Pros are that people are getting to try your services and possibly end up with clientele. Cons are you're getting people that are just out for deals.

I would say that I'm willing to try that than having to do it on my own.

12Vonna Posey  23/03/11 11:34:30 AM  Discounted Rates

If I've learned anything after 17 years of owning my own massage practice it's to discount products NOT human services.

Giving massage is a physically demanding job, and reality has taught me that the likelyhood of my doing this more than another 10 years is not probable. With that in mind, I give my clients 100% of my skills, techniques and abilities and they give me 100% of their equally hard earned cash.

Clients who value what you do remain loyal and don't go looking for the next 'great' deal - unhappy discontented clients move on.

So for new customers I offer a 30 min "sampler" massage.

For my loyal long time clients who want massage more frequently I do offer a package deal and they save about 17 bucks off each massage. In order for them to get that deal they have to use the package atleast once a month.

However, they rarely take me up on it.

No groupon or living social deals for this Therapist!

Thanks to Facebook and the internet there's no longer a need to pay for any advertising.

13Aubrey Stoughton  23/03/11 8:03:52 AM  Discounts

I must agree that they are good for exposure but quality clients are not typically generated by cheapening your services. My only discounts are for people who book multiple times per week. I am a riding instructor and that is my way of encouraging people to ride more often as that benefits me as an instructor, their horse in fitness and themselves in fitness. Having a more prepared and practiced rider is advertising for me down the road. I have to much overhead to deeply discount for such a high volume as groupon touts.

14Cat Tucker, MBA  23/03/11 6:08:22 AM  If you provide quality service - be cautious with discounting

I have 15+ years in marketing and business management and strategy and I've worked in large and small companies, with start-ups and market leaders.

If you provide a quality product or service that is needed, you are priced fairly and you have identified with your market, be very careful how or when you discount. Loyal customers will pay for quality and consistency, and they are the most profitable relationships you will ever have. Discount customers fly only by price and will jump ship for the next "deal".

A great alternative is a Rewards program.

15Danielle Rivera  22/03/11 2:49:55 PM  groupon

I posted an ad on groupon in october. they tried telling me I had to use 6mo expiration and have since seen car washes run ad and expire before all snow melted. I would never run groupon ad to expire longer then 2-3 months out. I sold 800 some. Also, i wrote for new clients only and could buy extra for gifts. I have learned if want for new clients only without fights do not let them buy for gifts as people act dumb and they dont read the fine print then you are constantly telling them exactly what says in fine print. my groupons finally expire in 3 wks and we have all been so tired of doing groupon massages last 2 months. yes it is great exposure but unless you are new to business groupon wins. they make way too much off each business!

16Kevin Skillen  21/03/11 5:00:43 PM  Why cheapen the Massage Therapy Industry? Are yu a Massage Professional or not?

Massage Therapists and Remedial Massage Therapist often study for years to gain their qualifications. Why cheapen the Profession by providing cheap or discounted massage? Do you see other Health Care Professionals discounting their professional services? I agree with Nicole Ferguson - they will jump on to get a cheap massage and then move on to the next cheap massage rather than return to you!!

If Therapists continue to discount or offer cheap massage or undercut one another it sets the expected fee at the lower level. Are you prepared to set your wage at a lower rate than what you already earn and increase the number of massages you would have to perform to earn the same level of income your currently earning?

Act like a Professional - set your fee and stick to it.

17Nicole Ferguson  21/03/11 11:53:28 AM  Voucher deals

The people booking on these websites are not likely to be repeat clients, they're looking for a bargain and with so many business' doing the "Groupon" etc thing, the clients will just jump on the next discount. Maybe there is a few repeat clients, but I can't see the benefits, I will never do it, I am busy enough without that kind of advertising. Why don't you all spend your money on keeping the clients you already have. Someone I know that did it used it as a way of training her staff, so I guess that was useful, but of course then the client is certainly not getting what they think they are paying for - I am totally against these websites!

18Shilonda Downing  20/03/11 4:45:45 PM  The verdict is still out

I'm still waiting on the final results of my add on Groupon, so the verdict is still out. :)

Shilonda Downing

Virtual Work Team LLC

{ Link }

19Charles Smith  20/03/11 10:00:45 AM  Groupon Experience

I ran a Groupon and had an overwhelming response to deal that I offered, and is the reason why I had to turn to for scheduling assistance. Any situation is what you make it. I fortunately had the forsight to run a deal, that was in the midrange of the different packages that I offer. This allows my clients to upgrade thier services for an additional fee. That way my company does not take such a large hit on the backend, once the Groupon money starts to get low. I had a rather large clientele prior to running my add via Groupon, but the additional exposure that my company has gained is fantastic. Bulldog Mobile Detailing has gained three new accounts and gained exposure in residential areas never before entered. No complaints here!!!

Groupon does, I dont know about the others, tell you not to expect to get rich by running an add. But the exposure is priceless!!!

Do the math on repeat customers, and new accounts that use your service exclusively...immeasurable! Bottom line growth, and discounted services are a tax write off...bonus.

20Bliss Fish  20/03/11 9:59:32 AM  voucher deals

The booking service with clickbook has had many different reactions some love it some clients hate it . I have done some deals with KGB deals wich is part of 118 118 service they take less money and we have found it benificial i guess it depends on what service you are offering i really wouldnt do it for massage service but we have fish spas which means that we can see more than one client at the same time , i would lik to fin out how we can do mulitple bookings at the same time that would be helpful and also an option where the client can add a voucher code would make life easier . bt on the whole click book has been invaluable to us .

21Becky Moser  20/03/11 3:33:24 AM  Discount deals

I have been pestered relentlessly by my local newspaper to sign up for their local service. I won't because it means I make 1/4 of the fee for a massage.

Groupon, etc., want you to discount your service by 50% and then pay them 50% for the advertising service. One person in my community sold 500 massage sessions for $8,000-- that sounds great until you do the math -- she's going to be giving 500 massages (25 per week for 5 months) for $16.

While this might be a great way to get your name out if you don't have much business ... my time is worth more than $16.

I think that the services -- Groupon, etc. -- are the real beneficiaries.