Over the past several years, websites like Groupon and LivingSocial have gained popularity from consumers looking to try new restaurants, salons and fitness businesses at a discounted price. We commonly hear yoga studio owners asking whether or not they should run a Groupon promotion to help bring in a fresh batch of students. There isn’t a simple yes or no answer, as it truly depends on the specific needs of your studio.
First and foremost, we typically recommend against discounting your prices. We’ve found that businesses who discount typically have a significantly lower average revenue per student than business who avoid discounts. In fact, after reading one of our Benchmark Reports, one customer pulled a report in Zen Planner to discover he had lost close to $20,000 in revenue in one year as a result of discounting too many memberships. Lesson learned: if you do decide to offer discounts, you must be very disciplined in doing so.
According to a study from Rice University, businesses have reported both successes and failures from running Groupon deals. Researcher Utpal Dholakia found:
- Out of 150 business, two-thirds reported their Groupon promotions were profitable
- The remaining third claimed to have lost money on their Groupon experience
- Only 25% of customers spent money beyond the face value of their Groupon discount
- 31% of customers reported returning back to the business
If you’re thinking about potentially running a promotion on a discount site, we highly recommend getting your free copy of our one-sheet, 5 Guidelines for Running a Groupon Promotion for Your Yoga Studio. In this guide, we first cover the pros and cons for running a promotion to help you determine if this is the right strategy for your studio.
For those who feel that the pros outweigh the cons, we then provide five guidelines you should follow if you decide to run a promotion. These guidelines are meant to help you establish rules for the promotion, as well as a strategy to convert these visitors to paying students.
Get your copy of this helpful guide today!