People are always on a lookout for savings. Regardless whether it is real estate, a new furniture or an oral care bundle, there’s a big chance that they’ll settle for something that brings the most for their money. Groupon is a great way for them to do some rest and relaxation, catch up with their shopping, and by physically active.

For businesses, the online deal marketplace presents several advantages. These benefits include a chance to get more business, keep the loyal ones, and serve as a great advertisement for the business. Massage therapists can also take part of the benefits Groupon has to offer.

This article will focus on the how Groupon works for massage therapists. It will specifically highlight the benefits and disadvantages associated with Groupon for businesses.

Additionally, it will explore reasons why coupons offered by the company is big among consumers.

Groupon: What Is It?

Groupon is one of the most popular online deal marketplace in the world. The company offers all kinds of coupons that allows its users to get discounted services or special packages with its partner establishments.

The online deal marketplace came into existence after its founder Andrew Mason got frustrated over him finding it hard to get out of his mobile phone provider contract.

It is fairly easy to get and use coupons offered by Groupon and its partner establishments. The company’s mobile app is also one of the most downloaded retail app on both the Apple App Store and Google Play. It is unlike your mom’s coupons.

With Groupon, all you need is to download their mobile app and search for products and services you would like to avail. The app was also made in a way to make it easier for consumers to find the product or service they want and save the coupon. This is one of the many reasons consumers are enticed to getting coupons from the company.

Why is Groupon Popular Among Consumers?

According to a Rice University Jesse H. Jones Graduate School of Business study, consumers are the biggest winners of services offered by companies like Groupon. The study showed how customers made use of the service to avail products and services they patronize and try something new without worrying about its impact on their wallet.

It also revealed that while many of the respondent businesses did saw profits after offering coupons through the service, almost half of the respondents said they did not realize profits from partnering with Groupon. But the question remains, why it is so popular?

Groupon is an instant hit for consumers looking for discounts while still getting the best service available. For those who are on a budget or are curious about the quality and the kind of services or products offered by a business, the use of a coupon is a nice way to experience it first-hand. The idea behind how the company works is not entirely new.

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The use of coupons to entice customers was introduced years ago. The traditional coupons either appear in newspapers or were sent directly via mail. In the age of mobile Internet and mobile apps, people still clamor for coupons and Groupon saw a market for that.

Also, ease of use can be attributed to the rise of companies like Groupon. Deals marketplaces nowadays come with mobile apps. It is a more convenient way for people to browse and find whether there are available coupon/s for the product or service they are going to buy. These companies are part of the revolution that simplifies the shopping experience through e-commerce.

Benefits of Using Groupon

After establishing the benefits offered by Groupon to consumers, you might be thinking what businesses can take from this partnership? You might be interested to go over these advantages claimed by other businesses.

It fills up classes.

The number of students in a class is an essential factor in determining how successful your efforts are in advertising your massage services. While it is still a hot debate, many therapists look at the number of their clients to check whether they are effective in what they do.

Foot traffic would never be a business issue when using Groupon. The online deals marketplace sees about 550,000 coupons a day according to a research done by ReadyCloud.

This is an important benefit for any kind of business as it ensures that people will walk into the doors of their business every day. On top of the ReadyCloud research, Investopedia enumerated the advantages offered by companies that offer electronic coupons, which includes:

  • Reducing the barrier of entry of new customers;
  • It brings back old consumers; and
  • Discount promotions are a good way of promoting your brand in social media.

Higher incremental revenue

Incremental revenue refers to the profit realized by your business without spending too much on advertising or increasing the price of your products and/or services. The use of Groupon allows you to earn instead of losing money on classes that were not fully booked. Given that there are no additional expenses that comes with releasing coupons, you can be assured that there would be profit with every student that signs up for your classes.

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A chance that your students purchase more classes or services

Businesses can use Groupon as an advertisement tool. It is an effective way to get the public know more about your massage business. Experience is the best way to attract your potential customers. Given that, you should invest in something that can promote your business while letting people try what you have to offer.

The use of coupons is like teasing your potential students of what you offer. It is their first taste of the quality of your massage services and your amenities. If they are fully satisfied with what they experienced, it could lead them to availing of your membership and booking classes directly.

Why Do Some Massage Therapists Dread Groupon

The use of coupons also has its negative impact on businesses. The following are some of the most common issues faced by businesses who have partnered with the online deals marketplace:

Loss of profit

Offering a service or a product with coupons is basically you selling your products or services at a lower price. To further explain, it means that you are lowering the chances of your business achieving its goal profit by the end of a certain period.

You can get a clearer picture of how Groupon hurts your profit if you calculate how it works. First, the company entices you that offering coupons through them is absolutely free. However, that is not the case at all times.

The company takes about 50% of your revenue as a fee for their service. Businesses that newly partnered with the company cannot easily see how it is damaging their profits. Groupon usually runs the coupon campaign for their partner establishments. At the end of each cycle, Groupon merely sends out a check containing your part of the profit. It is not until the end of your campaign that you can check how much you sacrificed to entice new students.

Devaluing your brand

Customers are very sensitive on how businesses price their products and/or services. Groupon-partner businesses offer discounts at never been imagined levels. This move can cause people to start thinking how you are taking advantage of the health trend to make more money. People tend to stay away from those who jack up their prices even when it is apparent that it could be sold at a much lower price. This is a perception that would be attached to your business when you starting offering coupons. But is it really a bad thing?

The disadvantage comes when your students, both new and loyal, started waiting for discounts before booking a class or availing your membership fee. The way that they were pampered too much creates a problem that sees them accustomed to paying for your services at a much lower price point than what it should really cost.

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No repeat customers

Groupon works by offering discount to your potential students. These students are more likely to stay with your classes until the time you stopped offering coupons. While it is good that you are able to attract new people into your community, it hurts your loyal students.

As coupons are only available to your new students, your loyal ones might start wondering why they are not given the same special treatment. Imagine yourself being a loyal customer of a brand that started offering discounts only to new customers.

It would be a deal breaker, right? As a customer, you may start double thinking about your loyalty and start shopping for alternatives. The same thing happens when you offer coupons.

Additionally, your loyal students are the one shouldering the cost of you offering coupons through Groupon. Given that Groupon students are attending your classes on a discount, there is someone in it that needs to shoulder the cost. It might not be instantly obvious to them that they are sharing with you a part of the cost left by your new students, but they will soon realize the bias you have on your new students.

Groupon: Friend, Enemy, or Frenemy?

The use of Groupon is growing at such a rapid rate. Businesses should no longer ignore the potentials associated with partnering with this online deals marketplace. Its partner establishments proved that the use of coupons is a very effective method to attract new customers.

However, like everything, Groupon also comes with some shortcomings for businesses. Profit sharing, the lost of your brand’s value, and non-repeat customers are some issues faced by businesses that makes use of this service.

The advantages and disadvantages that comes with using coupons can be best countered if you have a solid strategic plan when partnering with companies like Groupon. You must have a clear vision on what you expect from the partnership between your massage business and Groupon.

Additionally, you must have clear expectations not only when things go right, but also when it diverts from your original intention. Groupon do help businesses if you have know the disadvantages and advantages that comes with it. It allows you to be realistic and plan ahead to reap the most of what it offers.

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