There is no denying that the Spa and salon industries are strong in the U.S. According to Statista, the U.S. Spa industry is expected to make around 15.5 billion U.S. dollars in revenue. This marks an increase in revenue of $1.5 billion since 2012. Salons are also marketable; First Research reports that there are more than 86,000 salons and hair care businesses in the US. With so much competition out there, spas and salons need to stand out. Many businesses may be tempted to use deal sites such as Groupon or Living Social to gain more customers but this is not a strong strategy for everyone. Read on to learn more about deal sites and if they might be a good fit for your salon or spa.
1. Choose Wisely
If your spa or salon is considering placing a promotion on a deal site, it’s important that you are doing so strategically. Take time to consider your options. Groupon is the biggest deal site out there with one out of every seven Americans buying a Groupon in the past 12 months. Living Social is also another major player in the deal site market that focuses on local deals. Your Spa or Salon may want to consider industry specific sites like Spafinder or Lifebooker, which only provide deals for the beauty industry. Be sure to do research on which site will best reach your target audience.
2. Increased Volume
Deals sites provide your business with increased volume of clients, so if your a new business trying to cultivate a clientele or spread the word about your services to new customers deal sites can be a strong choice for you. Similarly if your business is struggling and you want to try to diversify your customer base, deal sites may be able to do the trick. Deal sites are also ideal for business that face fierce local competition. If there are other spas or salons near by, drawing customers to your door with a deal might help you win more traffic.
3. Smaller Profit Margin
Although these deal sites can improve the volume of your business and introduce new customers to what you have to offer, there are also potential disadvantages. With deal sites, not only are your profit margins reduced because of the discount but also because the deal site itself takes a portion of the revenue that the make you. This often means that deal sites are only profitable if customers decide to return after their initial deal. You can combat this by putting a cap on how many discounted appointments you take per day. Leaving room for regular paying customers will help combat the reduced profit margin or the promotion.
While deal sites can be a great strategy for you to boost your business, you want to make sure you take advantage of it in the right ways. These deals are a marketing strategy and most likely will not lead to increased profits immediately. Want to learn more about marketing your local business? Check out SinglePlatform on Twitter, Instagram, or Facebook. Get updates sent directly to your inbox by signing up for our newsletter below.