Groupon or Living social

I'm putting together some package deals with a local MUA and we are still looking at how to market the packages. Groupon came to mind, anyone have any experience offering package deals on there and if its a worthwhile avenue to explore?

mike_311 wrote in post #17961371
I'm putting together some package deals with a local MUA and we are still looking at how to market the packages. Groupon came to mind, anyone have any experience offering package deals on there and if its a worthwhile avenue to explore?

I don't think that anyone who is a serious professional looking to actually make a living has ever done the figures on Groupon and thought that they looked like a good idea. Reduce your normal rates by 50% and then give 50% of that reduced rate to Groupon as a commission. Remember also that your typical Groupon customer is effectively going to expect to pay those same prices going forwards, if you want them as a repeat customer.

If you really want to discount, then try putting it on FB or some other social media site, and give the first X to respond a discount. At least that way you are not having to pay a big % commision on an already heavily discounted item.

Alan

i just looked into how much we'd make and its not much, group on would make out great but me and my partner would be giving away our services for peanuts. good points on repeat customer expectations.

The only way to make it work is to make the Groupon good for a sitting fee or session credit, then upsell after the fact.

I'm not a good enough salesman to make that work. And, Groupon customers are going to be really annoyed when they find out that they paid a good $75.00 and you're not even giving them copyright to all 200 images that you took that day, what kind of scam are you running anyway, I'll be doing a chargeback on my credit card and leaving you a bad Yelp review.

mike_311 wrote in post #17961555
i just looked into how much we'd make and its not much, group on would make out great but me and my partner would be giving away our services for peanuts. good points on repeat customer expectations.

Yes the only people to make money out of offers on Groupon, are Groupon themselves. It's much like selling stuff on Amazon as a retailer. If you are in a sector of retail with really low margins, and the business that I did the figures for was generally running at under 25% gross to be competitive with general Amazon pricing. Then you have to pay amazon about 15% off the total selling price, including in the UK the 20% sales tax. Oh and you have to meet the trading terms of Amazon that basically says you have to give the customer about three times more leeway than the UK/Eu laws require. It very quickly looks like a good way to lose money. It's OK for Amazon who are taking about zero risk in this and raking in a great margin on all the goods sold through them. We just bought a new lawnmower, thanks to moving to a new home with a huge garden. We got the mower through Amazon rather than direct from the retailer's website as it was £10 cheaper on Amazon, with the same delivery costs and time frame. So the retailer is selling the mower cheaper on Amazon, and is paying Amazon's commision too. Oh and because it's Amazon it's thirty days unconditional on returns instead of the standard 7 days when buying direct. At £139 it was by far the cheapest self propelled petrol lawnmower I could find. Oh and Amazon kindly pointed out that I might need some oil for the motor, and a can for the petrol in the usually ordered section of the page. So we bought those items cheaper through Amazon, for other sellers, and it was still only the same cost as the lawnmower direct from the retailer. When I'm the customer I'll always try to get the best deal I can, even if I know how those big marketplace operations treat the retailer.

nathancarter wrote in post #17961756
The only way to make it work is to make the Groupon good for a sitting fee or session credit, then upsell after the fact.

I'm not a good enough salesman to make that work. And, Groupon customers are going to be really annoyed when they find out that they paid a good $75.00 and you're not even giving them copyright to all 200 images that you took that day, what kind of scam are you running anyway, I'll be doing a chargeback on my credit card and leaving you a bad Yelp review.

I couldn't have put this better myself.

Alan

Here is my direct experience with Living Social. I used to work at a martial arts school, LC convinced us to run an add for less than 50% of the actual cost. They then took I believe a 45-50% commission. At the end of the day, we sold 110+ memberships and at the end of the promotion, less than 5 people signed up for an on going membership.
So the mention above about your customers expecting that same price is 100% true. In fact, I think some of our current members felt a little slighted and ended up leaving because of it. They never said specifically that was the reason, but the timing and things that were mentioned at the time they left led me believe that was part of the reason. But we did get a decent one time check once the sale window closed, but in the long run, it was not really worth it.
Unless of course, you sell and people never use the deal. But even if you set the deal window to include a time expiration, they can still enforce you to use what they paid as offset on services after the deal window is closed. So you are still only getting about 25% value after all the commissions and discounts.
Just not worth it in my humble opinion.