January 2012

Charlene Abretske

Beauty Business Buzz | Charlene Abretske


Daily Deals: Disaster or Delight?

As a consumer, I am not going to lie, I love, Love, LOVE, one-day-only sale sites!

The ideas are great, the offers are amazing and sometimes even the ad copy is ridiculously entertaining.

Apparently, I am not alone in my affection for the new purchasing medium; Groupon is one of the fastest growing companies in the world and raised $700 million dollars in their IPO in November 2011.

There are thousands of new sites that cater to our modern need for instant gratification and our ancient gatherer instincts have us feeling we collectively "got in on" a too-good-to-be-true item or service.

There are so many companies doing these types of deals now, you have tons of choices on what is best for you and how you want to be promoted.

As a business owner, these "deals" can be great for your business or extremely detrimental based on the terms of the contracts, the type of deal offered, or if you are even ready to have a mass influx of clients into your business. Just because the tool is there doesn't mean it is in your best interest to use it.

Here are some questions you might want to ask yourself about if your business is ready to get started on a daily deal program:

What kind of client will we be getting? When you are approached or approach a deal company think about what client they will bring you. There has long been a belief that clients who want a discount are bad clients – this is simply not true. You have the opportunity to WOW a new client and re-book them every time they walk into your salon or spa. The company you choose should let you know information about the clients who purchase this type of deal through them. If they don't have any idea or it is too general, wait for a company that can provide you the info you are looking for.

Bigger Doesn't Mean Better. Just because a company has millions of e-mail addresses on their list doesn't mean ANYTHING when it comes to your business. Smaller services may still deliver better service, more appropriate deals, and can serve as a testing ground before you move on to the bigger sites like Groupon or Living Social for your first venture into this type of offering. Ask what kinds of issues other businesses like yours have encountered and see what they have to say.

The Devil Is In The Details. Look at your contract with a fine tooth comb and really make sure the details work for you; if they are limiting who you can work with, asking for exclusivity, asking for unlimited numbers of deals, money upfront, or asking you to pay if you don't sell enough then stay away from them - especially if it is your first deal. You can ask for these items to be changed, no contract is completely standard.

So Many Choices, So Little Time. Everyday there are new offer companies out there; look at some of the ones with smaller lists to begin with. These may include coupon magazines and newspapers that will give you free exposure across print, their website and eblast mediums. You will get more exposure and fewer deals, but the exposure may bring you better quality clients in the long run, the clients are more localized to your specific geographic area. Gaining 20 good clients is better than gaining 500 deal seekers.

What to Offer? Generally you will want to offer services that are not too labor intensive and will want to have customers coming back. I see a lot of hair straightening and "blow-out" specials out there and don't always feel this is the best way to go. These services take serious time and many clients who are trying them for the first time do not know what to expect.

Offering a service that normally costs anywhere from $175 to $400 and takes over two and a half hours at half off, and your take of that may be 50 to 70 percent, can leave you with as little as $44 for three hours of work, leaving you little time to make that back up in your wok day. Instead opt for lower price points with lots of perks that take minutes, not hours to perform like paraffin dips, conditioning treatments, aromatherapy, polish changes, neck and scalp massages. These special touches will have your new offer seekers wanting to visit you over and over again.

What's Your Plan, Stan? In order for a deal to be successful you need to have some kind of plan in place. This type of customer likes to be reached digitally, if you are not currently using email marketing or Facebook to update your clients on offers in your salon than you should start those items prior to creating a deal.

Another important area to consider is how are these clients going to be handled? I have purchased deals and felt like a "second-class customer" when I have been receiving my services. There was no offer for re-booking and there was not follow-up offers sent to me from the business. I did tip the service provider 100 percent and cannot figure out why they appear to not want my follow up appointments.

Daily deal programs, when run successfully, can be a quick and easy way to get brand new clients jazzed about your business – when handled correctly. Make sure you try them when your business is completely ready to handle the success that could be yours.

Charlene Abretske is an independent business advisor. To reach her email charleneabretske@gmail.com or call (760)453-1882.