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February 23, 2014
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Social media coupons are both a gift and a curse
  Read our expert's advice!
  Look before you leap into a heavily discounted coupon program

   Gains and Losses

   by DJ Victory-Franceschelli, co-owner of Enzo's Salon & Spa

As a business owner, my main objectives are to drive sales, turn a profit and continue to improve our customer service program to ensure that the first two goals are met.

While I recognize that spending money on advertising is essential to the health of my salon, I also know that, despite my best efforts, some things work and some things don't.

I understand the stated objective of Groupon, Living Social and similar sites: Potential customers buy deeply discounted coupons to experience new salons, restaurants or even inns.

It's a great deal for them, but from a salon perspective, it's rife with potential pitfalls. Here are just a few cautions:

● You sign a contract for 50% discounted services. For every coupon sold, you must give half of the remaining 50% to the coupon site, which leaves you with 25% of your regular service fee.

● Some coupon sites do not allow you to put a cap on the number of coupons you're willing to offer. A cap is important for several reasons, including controlling your costs, managing traffic and having available appointments for your existing clients.

● You have no control over who buys your coupon, hence you're spending advertising dollars on something that isn't specifically geared toward your target market.

● Expect some of your steady clients to be involved with social coupon sites. When they see your deal, they'll expect to pay for their services with coupons they bought for 50% off the regular price.

● Because many group coupon sites and some states don't allow coupons to expire, you could be honoring these discounts for years to come.

● Be prepared for hustlers, bargain shoppers and rude clients. Not every group coupon client will be guilty of poor behavior, but you should expect the percentage of negative interactions to rise exponentially.

● The crush of coupon clients can be overwhelming for the first week and...



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