Salon discount sites the pros and cons

Is the recent trend for using discount sites going away or is it just evolving? Ryan Fox Salon Consultant explores the state of the market. Since 2010 when Groupon launched in the UK, a discount culture has been growing in the salon world with hair and beauty offers reportedly representing a bigger percentage of offers than any other sector. As a result many salons have suffered from the effects of poorly thought through campaigns, but is the tide now turning? Pros Let’s not forget that all salons need new clients all the time in order to keep growing and discount sites can be part of the solution. However, be careful how you work out the discount so that you are at least covering your costs and restrict it to only your quiet times or underutilised stylists. If the discount site won’t allow you to set your terms, move on to another one. I have heard of a few success stories from using online discount sites, but only where the salon has restricted the terms of the offer in this way. Cons I recently conducted a survey about how salons are using discount sites. Generally, nearly all the salon owners I asked said they had had a bad experience with discount schemes and said they would never do one again. This was partly due to the way that deals have been sold in the past with huge numbers being sold in a short time, very little restriction and too high a level of discount being offered which meant after commission, there was very little income left for the salon. If you are going to do one, consider taking a more scientific approach to working out your discount deals so you know what you can offer and don't get swept along by the promise of huge numbers of new clients. Are things changing? There are signs that things are beginning to change however as the economy is starting to grow. Many Clients are less price sensitive than they have been and are starting to spend a little more again. However "The Groupon Effect" is still very much present and attracts a certain type of client who are often "one-hit wonders" who don't return. Don't make assumptions though, take control of the situation and have upgrade options ready for the same day and follow up offers if they rebook on the day for next time. Other discount sites Following Groupon there have been a number of other similar sites that have also entered the market such as Living Social, Wowcher, KGB deals, and also some that specialise in just hair and beauty like Wahanda and 118 118 Beauty. I had some positive feedback from salon owners in the survey about some of these sites, especially the ones that specialise in hair and beauty. However there are still a number of issues that sites like this will need to address in order to build trust within the industry. Conclusion Overall put things in perspective. Discounts sites definitely have their place but as a salon owner you need to keep them in their place. Don't look at discount sites as a "silver bullet" that is going to instantly grow your business. They are merely one part of your overall marketing plan and should be controlled and capped to a sensible level to give you a few new clients every week.   Ryan Fox is a hair and beauty salon consultant who improves salon performance through training and innovation. For more advice on planning your salon marketing visit www.umbrellaconsulting.co.uk