Debbie Westphal enjoys shopping online and keeps an eye out for interesting daily deal offers from sites such as Groupon and LivingSocial. Last summer, the owner and director of Betty Hill Dance Studios in Greater Des Moines, Iowa, decided it was time to offer a promotion of her own. Through LivingSocial, she offered a 50 percent discount on a four-week session of classes for students in preschool through 12th grade. Fifty-three people bought the deal, 43 actually came in and redeemed their vouchers and 22 children continued to take classes as regular students. “It had a really strong impact on my business,” says Westphal, “and I’m glad that I did it.”
Daily deal companies partner with business owners to offer discounts of as much as 50 to 90 percent off goods or services. Consumers purchase the vouchers online and redeem them at the business. “The folks that are coming through your front door have already paid up front, and as a business owner, you haven’t put any money down,” says Maire Griffin, LivingSocial spokesperson. However, revenue is typically evenly split between the merchant and the daily deal company—which means Westphal made about 25 percent of what she normally charges. But she also gained long-term students she might not have had otherwise. A recent study shows that 31 percent of those who buy daily deals are new customers—many of whom were not aware of the company before the deal.
Dance studios are ideal candidates to offer a deal. “There’s not much incremental cost to adding extra students to a class, so it makes a lot of sense,” says Patrick Albus, CEO of daily deal company kgbdeals.
Before running a deal, make sure you have existing classes with room for new students. You should also think about when you want your deal to become active. Westphal, for example, ran hers during the second week of August in hopes of encouraging new customers to stay into the new school year.
Anna Luckey opened dancemuse STUDIO in King of Prussia, Pennsylvania, in 2010. The studio mostly caters to adult students, and to get the word out, Luckey has offered multiple daily deals through several different companies. Because she’s adding students to existing classes and not adding extra classes, she has nothing to lose.
She’s found that it’s most beneficial to partner with a well-known company, which will have a larger number of people registered with its listserv. For example, where a smaller company might sell 200 vouchers, she would expect 1,500 from a large company. Either way, she is pleased enough with the results that she plans on running a deal every three to four months. “Even if we just get one returning student each time,” she says, “it’s worth it.” DT
Keep Them Coming
Perhaps the biggest challenge for studio owners who offer a daily deal is retaining new customers as regular students. Here are some tips.
- - Limit your daily deal to new customers only, and consider waiving your annual registration fee if they sign up for additional classes.
- - Collect contact information—e-mails, phone num- bers, addresses—from your new customers. Then include them on any e-mail blasts or mass mailings from your studio.
- - Make your new customers feel special. Westphal created a web page just for Betty Hill Dance Studios’ LivingSocial customers, to welcome them and
answer common questions.
- - But don’t make them feel too special. Do what you can to smoothly integrate them into your classes and studio environment so they feel like a part of the family.
Know Your Options
There are literally hundreds of daily deal businesses, and every single one has slightly different terms and policies. Be prepared to ask about the following—and possibly do some negotiating so you can get a more favorable contract.
- - Larger companies tend to have a standard 50/50 split, but smaller companies may be more flexible.
- - Ask about credit card processing fees and whether you have to sign an exclusivity clause.
- - Determine how much of a discount you’d like to offer, and when you can expect your payment.
Here is a closer look at three well-known daily deal sites:
Groupon (groupon.com): A certain number of people must purchase the deal before it tips and becomes active for everyone. The tipping point ensures the deal will be worthwhile for you, the merchant. Vouchers are generally available the day after purchase. Groupon works with you to find an arrangement that works best for you, the consumers and Groupon—usually the result is a 50/50 split of proceeds, and there may be credit card processing fees. Expect checks in three installments: the day after the deal finishes, and then at 30 days and 60 days. Consumers can print their vouchers out or redeem them from a mobile app. Groupon is available in 45 countries and 175 U.S. markets.
LivingSocial (livingsocial.com): Vouchers are available the day after purchase, and a unique link is given for buyers to share. If three people buy the deal with that link, the deal is free for the link’s owner. There are no credit card processing fees. LivingSocial mails one check three or four weeks after the offer runs online. Consumers can print out their vouchers or redeem them from a mobile app. LivingSocial is available in over 600 markets.
kgbdeals (kgbdeals.com): Vouchers are available immediately after purchase, and there are no credit card processing fees. Kgbdeals mails the first check (70 percent) within 10 days after the deal runs and the balance within 90 days. Consumers can print out vouchers or redeem them from a mobile app in most cases. Kgbdeals, a Google Offers partner, is currently in 24 major U.S. cities.
Hannah Maria Hayes is a freelance writer with an MA in dance education, American Ballet Theatre pedagogy emphasis, from New York University.
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