Four Steps to Groupon Success

Groupon is one of the most effective ways to generate new clients… if you follow these four simple steps.

While operating three successful tanning salons in Orlando, FL, Tim Winfrey mastered the zen of the Groupon deal. He works as Global Sales Manager at Synergy Tan these days, but he still remembers the four simple steps he developed for Groupon success, and he’s happy to share this information because he knows it’s something from which many salon professionals can benefit. “We were in a very competitive market,” said Tim, “with at least six other salons within a one-mile radius. We needed something that would give us an edge, and we made a huge impact by offering Groupon promotions to get this moving.”

The first step to Groupon success is offering a deal that’s so awesome, everyone will want to take advantage of it. “We offered one month of tanning in our level-three units for $35,” Tim said, “which was half off the regular monthly price. We also offered three spray-booth sessions for $38, which was a savings of $37.” These were rock-bottom prices to begin with, and Tim had to share half of the revenue with Groupon, but he chose to remain optimistic. “Groupon offers aren’t huge money-makers in and of themselves,” Tim added, “but they’re great for getting people through the door, and that’s what the first step is all about.”

Creating a promotion that’s an even better deal than your Groupon offer is Tim’s second step. “Groupon is all about getting people through your doors so you can up-sell them,” Tim explained. “When salon owners understand this, they’ll see the value in Groupon promotions.” When Tim’s customers came in to redeem their Groupon, they found an even bigger deal waiting for them – the opportunity to receive monthly tanning at the Groupon rates – $35/month for unlimited level-three tanning and/or three spray-tans for $38 – if they signed up before their Groupon offer expired. “We didn’t have to split our profits with Groupon because these were in-store offers,” Tim said, “and they were designed to build our EFT memberships, which provided us with revenue throughout the year.”

The third step to Groupon success is simple – train your staff in your offers and how to sell them. “Before we launched our special,” Tim said, “I had a Sunday night meeting/pizza party to train the staff and motivate them to up-sell each person who came in to redeem it.” Tim and his team went through mock-sales scenarios to better prepare each team member for the big day, and he also informed them of their goal – generate at least $20-$30 in additional product sales per tanner. Out of 800 Groupon offers sold, he says 379 of those people ended up buying his salon’s EFT program or long-term sunless memberships, and most remained members for three to six months. “That’s three to six months when they weren’t tanning with our competitors,” he added.

Offering Groupon customers the same friendly service you provide your members is the fourth step to succeeding with this promotional tool. Seems simple, right? Not always, according to Tim. “’You’re so nice here’ was one thing we kept hearing from our Groupon customers,” he explained, “and finally, I asked one of our tanners why she said that. She told me that other salons had treated her very poorly when she redeemed their Groupon deals. We heard this from other Groupon customers, as well.” Because Groupon offers amazing deals, some salon owners might think of those who use this service as “bottom-feeders.” Tim recommends treating your Groupon redeemers no differently than your regular members because every Groupon tanner represents a possible long-term member.

While Tim has four steps to Groupon success, he also has a tip for getting a better Groupon price for your salon. “Our first deal was so successful that Groupon called us and asked us to offer another,” he explained. “I asked them if I could get a better split, and they were willing to go 60/40 with me, which I believe is the highest they’re willing to offer a business partner. I was only able to do this because of the success of our first sale and all the great reviews our salon got on Groupon’s website.” Tim recommends asking for the 60/40 split only after you’ve offered at least one successful Groupon special.