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Why Groupon Secretly Prefers Selling Beauty Deals To Hair Deals

Group buying deal sites

Today we have a guest post from Ronan Perceval of Phorest.com.

According to a recent article on TechCrunch.com 20% of all Groupon and CityDeals worldwide are for hair and beauty treatments. That is a lot of money: approximately $1bn a year if you count all the deal sites and growing fast.

But of this 20% the majority are for beauty treatments rather than hair. This is because beauty customers are less loyalty to one salon than hair customers. According to data collected from 1,000 salons using Phorest.com salon software an average of 45% of customers who visit a hair salon in any one year will continue to visit that salon. For beauty salons the figure is only 30%.

This is because when people find a stylist that makes their hair look good, they are much more likely to want to return to that particular person than they are to the therapist that gives them a spray tan or massage that any therapist in a particular salon can be expected to carry out to the same standard.

Loyalty To Groupon

Groupon likes selling beauty offers because customers go from deal to deal, from salon to salon. In this way they stay loyal to Groupon rather than the salon after getting a deal and Groupon can continue milking those beauty customers for buying offers.

Groupon doesn’t like hair offers as much because customers are much more likely to stay with that salon after the deal and not use Groupon again for a hair offer. I was chatting to a hair and beauty salon owner yesterday who told me that they had run a beauty offer on Groupon CityDeal and wanted to run a hair offer next but the Groupon salesperson was adamant that they run another beauty one.

We ran a survey of 1,000 salon customers last week asking them how they chose their current hair salon and their regular beauty salon. The results are interesting. 9% of people first experienced their current hair salon because of an internet deal but only 4% had experienced their regular beauty salon for the first time this way. And this is despite the fact that there are 9 times as many internet deals for beauty than hair.

Be Careful What You Offer

For the dental and cosmetic beauty clinics on WhatClinic.com the advice is clear: if you are considering running a group deal think carefully about the treatment or service you are offering. Are customers who use the deal likely to return to you for this treatment again, or when the time comes will they just use another deal to go to another clinic?

Try to think of a way to make the deal depend on return visits in order to get the best value from it – maybe offer a 10% discount on all treatment for a 12 month period? And make sure you get to demonstrate why they should come back – excellent customer service, skilled staff, modern equipment, etc.

About the author: Ronan Perceval is the CEO of Phorest.com, a leading provider of salon software to thousands of salons and spas in the UK and Ireland. Phorest also operate MyZanadoo.com, the UK and Ireland’s number 1 destination for booking salon and spa appointments online.

 

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