Over the past few years, many salons have spoken about the rise of the ‘Groupon’ client. A client who visits the salon when a low, cut-price deal is offered via an external discount site. This client will only visit when a deal is on, and sometimes will not be brand loyal, visiting different salons or spas based on who has the best discounted deal.
However, with the rise of the Groupon client creeping higher each and every day, are discounts good or bad for business? Here, we look at the good vs the bad of offering salon discounts, and how this can affect the business both in a good and bad way.
Salon discounts – great for business
- Higher footfall – by offering a discounted service/offer, you can increase footfall into the salon/spa in an instant. Many find that buy providing money off a service/treatment increase the number of new clients who visit the salon.
- You could gain new clients – by offering a discount via an external company, this opens your business up to potential clients who may not be within your current market reach.
- Increase in profits – often by discounting a service or treatment, a surge in profits is seen almost instantly. Perhaps clients want to treat themselves or purchase as gifts, the rise in profits can often be very beneficial to a salon/spa.
Salon discounts – they don’t always work
- Dramatic loss – by offering a discount to a service or treatment, you must make a certain amount of money before you break even on the discount itself. If not achieved, this can result in the business making a significant loss.
- No client loyalty – client who often purchase discount vouchers/offers tend to not be brand loyal. They tend to follow the trend of visiting the highest discounted salons/spas and therefore are not confirmed to return unless an offer is on.
- Profit & loss nightmare – by offering a percentage off services and treatments can play havoc with the profit and loss accounts. Doing this throughout the year can throw the numbers off and make the accounts very hard to complete.