Apogee Group LLC Blog

Trials and Tribulations of Business & Healthcare

LivingSocial, Groupon, Google Offers - Does it work?

Posted by Taz • Jun 23, 2012 • Category: Business

Author
Taz
Some reviews say yes, some reviews say no. I think it depends on how you do it. I own a business called Kingley Health. We're a healthcare business that integrates nutrition, fitness, mental health, massage, a teaching kitchen, a cafe, physical therapy and medicine into a program for those that are looking for weight loss. We are usually the last stop (or second to last stop prior to bariatric surgery). Most people come to us because they have tried everything. It is a journey. We help people on that journey.

The hardest thing for any business is lead generation. We are no different.

So we took the plunge and signed up with LivingSocial (if for no other reason it was because Groupon and Google Offers never responded).

All these "deals" have one thing in common - you don't spend money on your marketing. You give them a portion of your revenues from purchased deals. As a business owner who spends thousands of dollars a month on marketing, zero upfront investment vs spending money sounds attractive.

The sales person at LivingSocial responded fairly quickly. The offer that we were interested in doing was massage...pretty standard, yes? Unfortunately it is so standard that LivingSocial indicated that Central Jersey was oversaturated with massage offers, so "no go". I was deflated, as I had hoped that massage would be the easiest thing to sell.

I was talking to my business partner, Jay Kingley, on what we could offer that would make sense. We didn't want to fall into the trap of no repeat business or losing money on the deal. Everything that I had read indicated that these types of initiatives are only successful if you can get you leads to spend additional monies above and beyond the purchase price of the deal. We went through every part of our business and analyzed risk/reward. It took us awhile but we settled on three offerings.

LivingSocial has something called partner offers where you offer potential purchasers a choice - for $x get this or this. We decided to focus on the fitness portion of our business and offer 10 sessions of Zumba or Yoga, Kettlebells or TRX, and Small Group Personal Training. We decided that we would do 50% off (this is the minimum discount you have to give) they get 50% of the revenues so we would make $37.50 per person vs. our normal $150. The conversation with the sales rep went a little like this (yes this is a little exaggerated)

Me: "We want to do three offerings. Our first offer will be 10 session class card of Zumba or Yoga, our second 10 session class card of Kettlebells or TRX, and our third 10 session class card of Small Group Personal Training."
Rep: "Well our market analyst department has found the following to be effective - Zumba and Yoga. We're not so sure about Kettlebells or TRX. Probably wouldn't do Small Group Personal Training"
After a bit of discussion...
Me: "OK"
Rep: "What percentage do you want to discount?"
Me: "50%"
Rep: "Well our marketing analyst department has found the following to be effective..."

Needless to say the conversation didn't go as I planned. We ended up doing one offer...10 classes of Zumba or Yoga for $29 or Kettlebells or TRX for $39. Yes....we would make $14.50 - $19.50 per person vs $150. Hmph...but what did we have to lose?

They created the copy for the ad. After signing the agreement (pretty standard stuff) we were up in less than 3 weeks. I sat there at 5am on a Sunday refreshing the deal to see the first purchase....it came in around 7:30am...*phew big sigh of relief*...where was it bought...Pittsburgh, PA? (we are in Piscataway, NJ) I sat there with my head in my hands....8:00am another one...yeah! This one came from someone in New Brunswick, NJ. I couldn't contain my excitement. I sent out an email to my staff..."2 deals bought and it's only 8:00am!". This continued for the next three days.

So did it work for us? Yes. We sold 129 vouchers. Between refunds and declines we ended up with 121 total valid vouchers sold, and25% redeemed in the first week.

Here are three points you have to keep in mind in order for these deals to work for you:

1) Make sure that your cost is in alignment with the deal you are promoting.
2) Have a hard to refuse upsell promo ready for these leads.
3) Have an automated sales process so you don't wind up wasting time and effort, all while barely breaking even.

If you need help figuring out steps 1-3 for your business my partner and I can help you. Following these steps is what made this successful for Kingley Health. Otherwise I think I would be writing a different review.

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