My Experience with Groupon

[mbs431]

Hey guys,



It`s easy to say Groupon is not for every business. I have heard from other detailers that this program has done wonders for their company. Now let me tell you my story. I wanted to do this for a while and when Groupon contacted me to set it up, I decided to give it a shot. I ended up selling about 200 groupons. Keep in mind, I don`t have a large crew and I am not an express service. It is myself and another guy and we take the time to carefully go through a vehicle. We only do about two cars a day. Getting a lump sum from groupon after the first day was nice. But now I am four months in, the money has long stopped coming, and there is still no light at the end of the tunnel. I will never, EVER, do this again. Here is why:



-Groupon customers are deal hungry. You will most likely never hear from them again, even after they praise you for how great of a job you did

-Detailing companies are a dime a dozen. There are always several groupon ads running for detailing in my area

-Upselling is close to impossible. Nobody is interested in getting any other service than what the groupon deal includes

-Out of about 130 people so far, I have only been tipped 10-12 times, even though it says tip generously on the groupon

-Nobody reads the fine print. I specifically stated on the groupon "no extended vehicles." I can`t tell you how many Tahoes and Suburbans have shown up



Overall, this has taken a negative toll on my business and I am currently in discussion with groupon trying to rid the remaining groupons I have. Please do research on this company before trying it out. I wish I did.

[David Fermani]

School me on this as I`m a newcomer to Groupon:



If you can offer a bare bones general service with Groupon (wash & wax w/interior detail for example) and discount it appropriately to where you can make money on each deal how can this not be a great push for extra business? If I was high-volume centric (especially catering to dealers) I would be all over this kind of advertising. This is basically what a dealer pricing structure is like. Yes, you may be selling at 50% of retail, but you`re making it up on the big end. The key would be to clearly list what is included and concentrate on upselling additional services. Also, I doubt people are getting rich with this tactic, but you are reaching out to so many people that will remember you in the future and telling their friends about you.

[Alfisti]

I`ve never heard anything good from detailers who`ve tried coupon deals.



Clients want the best job and bring total beaters to you. Then complain that the car doesn`t look new. They`re not interested in repeat business.



They bad-mouth you to their friends and damage your brand. You`ve made no money and get a bad reputation.



I`ve heard it so many times. I`m sorry you had to learn the hard way.

[David Fermani]

But if yoyu structure it so there`s not a big factor for failure/dissappointment don`t you think there could be a good chance of a positive outcome?



For Example:

includes Wash / Wax / Wheels / Tires / Wheel Wells / Door Jambs / Glass / Light Clean Interior (Regularly $149...Groupon $79.99) People tend to want clean and shiny and piece of mind that their car is being protected.



*fine print limitations*: Extra for shampooing / Scratch Removal or polishing / Tar / Engines

[mbs431]

But if yoyu structure it so there`s not a big factor for failure/dissappointment don`t you think there could be a good chance of a positive outcome?



For Example:

includes Wash / Wax / Wheels / Tires / Wheel Wells / Door Jambs / Glass / Light Clean Interior (Regularly $149...Groupon $79.99) People tend to want clean and shiny and piece of mind that their car is being protected.



*fine print limitations*: Extra for shampooing / Scratch Removal or polishing / Tar / Engines



David, I hear what you are saying, but 50% off is what the customer pays. That $79.99 is cut in half again. Half to groupon, the other half to you. I am getting a whopping $40 for a car.

[Nth Degree]

But if yoyu structure it so there`s not a big factor for failure/dissappointment don`t you think there could be a good chance of a positive outcome?



For Example:

includes Wash / Wax / Wheels / Tires / Wheel Wells / Door Jambs / Glass / Light Clean Interior (Regularly $149...Groupon $79.99) People tend to want clean and shiny and piece of mind that their car is being protected.



*fine print limitations*: Extra for shampooing / Scratch Removal or polishing / Tar / Engines



The problem is that the customer purchases the deal at ~50% but the business only gets half of that, so you are really only getting 25% of the normal price. As many have discovered, when you don`t do enough volume to have a crew the deal consumes too much of your time and resources and interferes with your ability to take on jobs at full price. Your initial instinct is the same as all those who have gone for the deal, only to get burned. There is someone, I don`t recall who, that had a positive result. The key was having employees to handle the deals while still being able to take on other work.

[C. Charles Hahn]

-Groupon customers are deal hungry. You will most likely never hear from them again, even after they praise you for how great of a job you did



-Upselling is close to impossible. Nobody is interested in getting any other service than what the groupon deal includes



-Nobody reads the fine print. I specifically stated on the groupon "no extended vehicles." I can`t tell you how many Tahoes and Suburbans have shown up





I`ve seen/heard about similar things happening at restaurants and other businesses that run Groupon deals -- people who are already regulars will buy in to get a discount, or a bunch of people who would never go in without getting a "deal" and likewise probably won`t be back unless or until another Groupon is offered will show up. The big difference here is that we`re selling a non-essential service as opposed to a tangible good, so it can be a bit harder to get it through people`s heads no matter how clearly you spell things out... not that it can`t be done, though.



Have you ended up refunding the Groupon for people who show up with large vehicles?

[imported_Quenga]

But if yoyu structure it so there`s not a big factor for failure/dissappointment don`t you think there could be a good chance of a positive outcome?



For Example:

includes Wash / Wax / Wheels / Tires / Wheel Wells / Door Jambs / Glass / Light Clean Interior (Regularly $149...Groupon $79.99) People tend to want clean and shiny and piece of mind that their car is being protected.



*fine print limitations*: Extra for shampooing / Scratch Removal or polishing / Tar / Engines





The problem is these coupon sites take a 50% cut of your 50% or more discounted service. With larger populations and more competition, it`ll hurt your business. The only thing these coupon sites are good for are those with really high profit margins (tanning salons love these things) and deals that will require extras, like $20 restaurant deals. I can`t remember the last time I only spent $20 dining out.



Also, people forget to hunt for the right kind of customer. You aren`t going to hand out flyers in the hood to get high-end clients. Most detail clients are affluent and educated. Most coupon shoppers are the opposite. I`ve been burned by cheap people every time. I no longer mess with them.





You can also flat out lie to people like a local I saw. Wash for $30, Wash and Wax for $85...which only includes adding wax. Kinda high, but that`s not even the kicker. His Wash and Wax has a "retail value" of $165. He threw up a coupon deal for 52% off his $165 wash and wax. You paid $79 for the deal, which is $6 off his NORMAL price. But, business like that is shady and I hope it ruins him.



With all that said, I think people should really look into what they are offering on these deals. Think "high profit margin"...what does that lead you to offer? Coatings/Protectants.

[mbs431]

I`ve seen/heard about similar things happening at restaurants and other businesses that run Groupon deals -- people who are already regulars will buy in to get a discount, or a bunch of people who would never go in without getting a "deal" and likewise probably won`t be back unless or until another Groupon is offered will show up. The big difference here is that we`re selling a non-essential service as opposed to a tangible good, so it can be a bit harder to get it through people`s heads no matter how clearly you spell things out... not that it can`t be done, though.



Have you ended up refunding the Groupon for people who show up with large vehicles?



Charlie,



You bring up some good points and something I left out too. Regular customers. I had four regular customers purchase a groupon who have paid full price so many times in the past. It was dissapointing. Also, as stated on the groupon, this deal was for new customers only. Groupon has absolutely no control over who purchases these things. And I have been able to refund the larger vehicles. But this is one of the problems Groupon is facing. They are losing a ton of money giving refunds. I can simply tell customers I refuse to honor their deal and they can get a full refund. Google "groupon going out of business." Everyone sees it happening.

[imported_Quenga]

People need to think like big business when they do this stuff. Create deals that are separate from your normal services. Example:



Fabric Protection: Entire Car - $399! Carpet/Floor Mats Only - $199! FREE touch-ups for 5 years!



*Fine Print* - A complete vacuum and light steam cleaning will be done prior to application. Excessive soiling is extra and not included. Free touch-ups require a yearly "Maintenance Detail".



Coupon discount = $199/$99. Your take home = $100/$50. All you have to do is vacuum and hit it with a steamer. Complete a basic wash while you wait for it to dry, then add your favorite fabric protector. How long is this going to really take you? An hour? 2 maybe?? Easy money.



This is an up-sell with extremely high profit margins. How much does a little 303 Fabric Guard or Scotchgard even cost you? Squat! Refund any customer that doesn`t read the fine print. Be professional and apologetic. Offer them a discount in person if they are upset, this cuts out the coupon middle man. Offer a free basic wash as an apology and leave them your card in case they change their mind. Tell them Groupon/LS will refund their money, but you will give them the same deal if they call you back within X amount of months. This further cuts out the middleman and makes you even more money. Lastly, you`ll lock in a repeat customer that will pay full price in the future. DO A GOOD JOB and they will tell their friends. Offer their referrals the SAME DEAL and you`ll make twice as much money.



We all know dealerships charge this much for fabric protection, and we tend to "blast" them for it to our customers. Yet, they are making millions. Are customers happy with the protection? Yes. All of them? No. But what business has 100% satisfaction? Dealers are smarter than detailers when it comes to business. However, detailers are better than dealers when it comes to detailing. Combine them and take advantage of both worlds.



Groupon/LS is a shady business, I have no qualms going behind their back to gain customers and keep my business going. They prey on small businesses looking to make it and I truly despise them. Work around the system. That is the American way :), lol (JOKING...sort of!)

[Richard Grasa]

I`m really sorry to hear about your negative experience. I had a very positive experience with my LivingSocial deals (2 of them) and my savenowct.com deal, both of which are identical to Groupon. It was very challenging to get all the details done, did plenty of beaters, many unappreciative price shopper types, etc. But now that my deals are done and over, I`ve gotten many repeat customers paying full price. I`m def glad I did my deals, but at this point, would never think of running another one as I`m now established and don`t need to put up with the headaches it did cause. There def were points during taking care of the oh, 1200 or so deals I sold that I wished I had not run the deals, but it is now paying off. Thankfully many people never even redeemed their vouchers. I just posted a thread a couple weeks or so sharing my experience if anyone wants to check that out. It`s def not for everyone and I wouldn`t recommend it to anyone unless you are 200% sure you can handle all of the negatives that come with the deals. I hope you make it out the other side in good shape, I think you WILL see some return customers, it will just take some time, as long as you made the people happy that can be made happy you should see some positive effects a little ways down the road. Hang it there, it will get better.



The ONLY reason I ran my deals was to get people in the door in my brand new shop with no advertising money spent up front to show what I can do. I would say this is NOT for an established business that has a customer base already or a business that can`t handle the negatives that come with it. I will also say that I hope these deal companies go under soon, even though I did have more positives than negatives as they DO hurt businesses more than help them. I was very lucky to come out the other side in as good shape as I did and now getting many repeat customers.



EDIT: FWIW, before I committed to running my deals I spent almost 3 weeks going over numbers, negotiating lower commission they would take, making sure the deal I ran would not hurt me financially, etc. If you just jump into a deal without doing this, as you found out, it will def bite you in the ***. The groupon salespeople will pressure you into running a deal that will end up hurting you, claiming it won`t hurt you, and you can`t fall for this, you must run the numbers over and over, make sure you run a deal you can afford, etc. This is why business get hurt, not doing their homework. Not knocking you, just sharing what worked for me. Much luck getting through this in good shape and if you ever need to ask me any questions in private, don`t hesitate to PM me.

[Jean-Claude]

Groupon has called me I don`t know how many times trying to get me to buy into it with a deal. No thanks. Other than being dishonest about my retail prices, I don`t see how this will work. I know they claim that groupon is a cheap way to pay for advertising, but it`s advertising to coupon clippers, not my target clients. Can`t see it making sense unless you are a volume company with very high margins.

[David Fermani]

Isn`t there a popular service that detailers could offer that can be discounted to the point where you`re still profitable? If you had enough volume and the proper help there`s gotta be a sweet spot to winning?

[JohnKleven]

The problem with Groupon and other sites that are similar is that they usually don`t create loyal customers. Unfortunately, if the customer liked your work, the next time they need a detail they will likely look on groupon again, and if you`re not the detailer listed on the site, they will likely move on to the next company.

[Richard Grasa]

Groupon has called me I don`t know how many times trying to get me to buy into it with a deal. No thanks. Other than being dishonest about my retail prices, I don`t see how this will work. I know they claim that groupon is a cheap way to pay for advertising, but it`s advertising to coupon clippers, not my target clients. Can`t see it making sense unless you are a volume company with very high margins.



It`s good that you realize this. I actually created an Express Detail just for my deal so I wouldn`t be dishonest about my pricing and it left plenty of room for upselling. They were trying to pressure me into offering a full detail, no way that would have worked, I would have lost my shirt. With the Express Detail, I did a little better than breaking even. I`m def not a volume detailer, but for the deals, I had it set up where we could crank out 5 - 7 Express details a day to get them done quickly. It def helped to have a butt busting young helper!