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Social coupons offered by groups such as Groupon and Living Social offer a great deal to consumers, who buy goods and services at deep discounts. Such specials present an opportunity for studios and teachers to showcase their offerings to a new audience, but they can lead to more “success” than studios can handle, flooding classes with new students who may or may not stick around once the special is over. Before you partner with a social coupon site, consider the pros and cons and create a plan for retaining your new students.
Bringing in Business
For Laura Urgellés, owner of the Yoga Fusion Studio in Chevy Chase, Maryland, working with Groupon was a positive experience. Her offer of a five-class package (valued at $90) for only $15, generated 800 sales—the limit she set in consultation with Groupon. While her studio was more full than usual, she says, “We’ve never had to turn people away, and we’ve sold memberships to the Groupon buyers.” Moksha Yoga, with three locations in Chicago, has had the same experience. The studio sold 2,800 coupons with its $29 five-class promotion. “We have larger studios, so we can always fit a few more people in,” explains marketing and event manager Rachel Zargo. “This has been a great opportunity to expose yoga to a much wider audience that may have not otherwise given it a try.”
The Downside of Success
While the potential to reach new students and even pull in a profit is appealing, you must also be aware of some possible pitfalls. If you are in a smaller studio, will you be overwhelmed by a sudden influx of new students? Do you have adequate parking, props, and staff to accommodate them? How will their presence affect your classes? For example, if you have a class comprised mostly of beginners, how will that change the lesson plan?
Urgellés says that as many of her Groupon customers are new to yoga, “they are not familiar with the etiquette: take your shoes off, turn your phone off, talk quietly.” Think about how you can best integrate these new students while keeping your existing regulars happy.
Another consideration is how social coupons affect the value of yoga. Will students now seek only cut-rate classes? Are teachers being appropriately compensated for their work? The studio may only be able to keep 50 percent of the total sale, and teachers may not be paid the per-head rate they normally would from a full-priced class.
“Any coupon or special runs the risk of undervaluing a product or service,” says Maria Camacho, owner of Little Yoga Studio in San Diego, who has used coupon programs including Groupon, Living Social, and Yelp Deals with increasing success since 2009. “But I believe the potential benefits of gaining a wider audience and retaining customers have outweighed that risk.” Just make sure to run the numbers on your deal to be sure you won’t be taking a big hit in payroll or overhead in your effort to bring more people in the door.
Don’t expect to earn much, if any money, off a social coupon offering. The goal of using a social coupon site is to build your customer base, bringing yoga to more people who will keep coming back. Retaining these new customers is the key. You must have a plan or you’ll lose all this traffic when the next yoga studio coupon offer comes along. “We want to make sure this isn’t just a one-time deal; instead, we want people to take up yoga as a lifelong practice,” says Zargo.
Delivering a high-quality service and making students comfortable will ultimately help your retention rates. “Once people come into the studio, they love the space, they love the teachers, and some decide to stay. In some cases, they tell their friends about it,” Camacho says. The last word? Social coupons might bring in new traffic, but ultimately, word of mouth is still the best advertising.
Sage Rountree is author of The Athlete’s Guide to Yoga. Co-owner of the Carrboro Yoga Company in central North Carolina, she teaches yoga to athletes nationwide.
Tips for Studios Using Social Coupons
Research the site. How many customers does the social coupon site reach? What percentage of the deal goes to them? Are businesses and consumers happy with their service?
Lay out the terms clearly. Is your offer for only those new to your studio? Is there a limit on the number of coupons you will sell? What is the expiration date?
Prep your staff. Be sure you are ready to handle the influx of new students. Have your parking well marked, your waivers ready to sign, plenty of props on hand, and your teachers ready to accommodate the new bodies.
Have a retention plan. How will you track usage of the coupons? How will you hold on to the new traffic your coupon offer brought in? Have your plan in place before the offer goes online, so you can capture the students and keep them coming back. This could mean offering a discount to social coupon buyers on their next class package, assigning them yoga advisers, or devising an e-mail campaign to encourage them to stick around.