Im wondering what kind of deals you guys have offered and if it was worth it to you? Im mobile so im having to factor my travel also, I figure i can work certain areas of the city on certain days to get the most out of my deal. I guess im really just looking for your guys expert advice on here, what are the type of problems i should prepare for? Your help is very much appreciated.
how many of you guys have done a livingsocial deal?
- Thread starter jose206
- Start date
safetyman2010
New member
Wouldn't even consider it. Will it most likely drive people to buy from you? Yes? Are they the customers you want? Most likely not. Several things to consider:
1. Living Social/Groupon/Deal Find etc... require a HUGE discount off your regular price in order to offer a deal - usually minimum 60% off from what I have seen
2. Living Social/Groupon/Deal Find etc.. usually keep HALF of whatever they sell for you and only remit your portion over a period of several payments
3. Consider your perfect customer. What is their motivation for using your business? Obviously they want/need their vehicle detailed but want a quality job. What is the typical "deal site" customer's motivation? A DEAL. You'll get them in on the cheap price but will they ever come back regardless of their satisfaction with the job or will they simply buy the next "deal" that pops up? In my experience you simply "rent" customers like this until they find a better deal and detailing is a huge target for these deal sites. I have received probably close to a hundred calls, e-mails and in store vista from these companies trying to sign me up. In my area there has been a detailing deal at least once a month all year and usually from substandard providers.
4. How many of these deals can you afford to do? It's almost spring which is the biggest money making period all year (at least in my area). No way in hell I am doing any job that I'm not getting paid full price on that would take the place of a higher paying job.
In my opinion the only way to make these sites pay off is to schedule a "deal" around your slowest 3 month period and make the deal only valid during that time period. It makes a difference how you structure the deal too. You want to do something that still allows you some wiggle room to upsell if possible. I'll give you an example of how NOT to do it. We offered a half price $50 gift certificate deal with a radio station a few years ago. My biggest mistake was not adding any restrictions. We got a ton of people that bought the certificates for $25 and then brought in a trashed vehicle and said "what can I get for $50?" instead of "what do I need to have done? I have a $50 gift certificate to use towards your services". The problem is you will get a ton of people that never clean or detail their car buying because it's cheap. They don't understand what detailing is or what it costs. We had a woman come in and request a wash/vacuum (started at $45 at the time) and said "just do the best you can for the $50. Her interior was TRASHED and there was no way in hell it could be made to look presentable by doing anything less than a full interior shampoo. I know from experience this is a job you do not want because it won't look good if you do what they are actually willing to pay and it leads to complaints. I ended up offering the woman 20 different combinations of what we could do for $50 if that was all she wanted to spend - none included the interior and ended up having to ask her to leave after 15 minutes of her bitching.
I'm fortunate that I don't need to offer this kind of thing but am always looking for creative ways to offer my customers added value at a great price that is mutually beneficial for all of us. In my opinion - these deal sites are a loser and should be avoided but that's just my $0.02
1. Living Social/Groupon/Deal Find etc... require a HUGE discount off your regular price in order to offer a deal - usually minimum 60% off from what I have seen
2. Living Social/Groupon/Deal Find etc.. usually keep HALF of whatever they sell for you and only remit your portion over a period of several payments
3. Consider your perfect customer. What is their motivation for using your business? Obviously they want/need their vehicle detailed but want a quality job. What is the typical "deal site" customer's motivation? A DEAL. You'll get them in on the cheap price but will they ever come back regardless of their satisfaction with the job or will they simply buy the next "deal" that pops up? In my experience you simply "rent" customers like this until they find a better deal and detailing is a huge target for these deal sites. I have received probably close to a hundred calls, e-mails and in store vista from these companies trying to sign me up. In my area there has been a detailing deal at least once a month all year and usually from substandard providers.
4. How many of these deals can you afford to do? It's almost spring which is the biggest money making period all year (at least in my area). No way in hell I am doing any job that I'm not getting paid full price on that would take the place of a higher paying job.
In my opinion the only way to make these sites pay off is to schedule a "deal" around your slowest 3 month period and make the deal only valid during that time period. It makes a difference how you structure the deal too. You want to do something that still allows you some wiggle room to upsell if possible. I'll give you an example of how NOT to do it. We offered a half price $50 gift certificate deal with a radio station a few years ago. My biggest mistake was not adding any restrictions. We got a ton of people that bought the certificates for $25 and then brought in a trashed vehicle and said "what can I get for $50?" instead of "what do I need to have done? I have a $50 gift certificate to use towards your services". The problem is you will get a ton of people that never clean or detail their car buying because it's cheap. They don't understand what detailing is or what it costs. We had a woman come in and request a wash/vacuum (started at $45 at the time) and said "just do the best you can for the $50. Her interior was TRASHED and there was no way in hell it could be made to look presentable by doing anything less than a full interior shampoo. I know from experience this is a job you do not want because it won't look good if you do what they are actually willing to pay and it leads to complaints. I ended up offering the woman 20 different combinations of what we could do for $50 if that was all she wanted to spend - none included the interior and ended up having to ask her to leave after 15 minutes of her bitching.
I'm fortunate that I don't need to offer this kind of thing but am always looking for creative ways to offer my customers added value at a great price that is mutually beneficial for all of us. In my opinion - these deal sites are a loser and should be avoided but that's just my $0.02
Nth Degree
New member
Rather than link to a competing forum here is a copy and paste from part of my post about Living Social deals:
Let's do some math. Let's say you manage to sell 250 deals for $50 profit each. ($200 regular price @ 50% discount to customer minus 25% to Living Social.) 50 of them never cash in, so 200 details @ 5 hours each.
250 x $50= $12,500
200 details x 5 hours= 1000 hours
$12,500/1000 hours= $12.50/hour minus expenses.
1000 hours / 40 hours per week = 25 weeks (6 months and you are stuck honoring the deals.)
Compare to:
50 full price details @ $200
50 x $200= $10,000
50 details x 5 hours= 250 hours
$10,000/250 hours= $40/hour minus expenses.
250 hours / 40 hours per week = 6.25 weeks
And now you have 4+ months to try to gather more business or do whatever else. If you are really desperate you could offer a free detail to someone if they send you two friends. You still come out way ahead and you can stop anytime you want.
It should also be noted that people have friends primarily in their similar income range. Those who can afford a full price detail have many friends who also can afford it. People who only can afford a detail because of the Living Social deal have a lot of friends who can't afford the full price either.
That's not to say it hasn't been done successfully. But that is only when it is a volume shop that can spare the manpower and have it not prevent work being done for full paying customers.
Let's do some math. Let's say you manage to sell 250 deals for $50 profit each. ($200 regular price @ 50% discount to customer minus 25% to Living Social.) 50 of them never cash in, so 200 details @ 5 hours each.
250 x $50= $12,500
200 details x 5 hours= 1000 hours
$12,500/1000 hours= $12.50/hour minus expenses.
1000 hours / 40 hours per week = 25 weeks (6 months and you are stuck honoring the deals.)
Compare to:
50 full price details @ $200
50 x $200= $10,000
50 details x 5 hours= 250 hours
$10,000/250 hours= $40/hour minus expenses.
250 hours / 40 hours per week = 6.25 weeks
And now you have 4+ months to try to gather more business or do whatever else. If you are really desperate you could offer a free detail to someone if they send you two friends. You still come out way ahead and you can stop anytime you want.
It should also be noted that people have friends primarily in their similar income range. Those who can afford a full price detail have many friends who also can afford it. People who only can afford a detail because of the Living Social deal have a lot of friends who can't afford the full price either.
That's not to say it hasn't been done successfully. But that is only when it is a volume shop that can spare the manpower and have it not prevent work being done for full paying customers.
The Wraith
New member
I would only do it as a last resort. The type of people that buy LivingSocial and Groupon deals have no intention of returning to the participating businesses to pay normal prices later on. It's a double edged sword, and I would stay away. Not to mention, they deduct their commission out of the reimbursement you get in the first place. It's great for customers, not businesses.
Hey Scotty, I actually did put a few restrictions on my deal(pet hair/excessively dirty car/13mile radius). Not only that but I offered a package that can be done within 40minutes if done efficiently and allows plenty of room for upgrades like carpet shampooing. It's actually very basic, I figure the larger part of the livingsocial audience would just want a light cleaning and would love the idea that its a mobile service which would make it easier on their schedule. I would like to plan about 7 of these jobs in a day when I get the first flood of requests and schedule jobs in the same general area each day to save on time and gas. My only concern right now is cleaning wheels and tires with my vapor steamer as fast/safe as possible. I ran a similar deal before but learned not to give so much on the voucher but instead allow the customer to buy add on's at a discounted price if they purchased the voucher. This way I can still make a little more money. I also think something like this can help my ranking on google if I'm not mistaken?
I can understand how it can be a HORRIBLE idea, the package i'm offering though is very basic. I wouldn't consider doing my full package through a deal like this, but I figure something that takes around 40mins to do then I can still come out ahead and hopefully gain a few new customers at least.
Nth Degree said:
safetyman2010
New member
jose206 said:
As has been mentioned earlier, it's not just about trying to break even/make money on the initial deal it's about how many people you can convert into repeat customers. In my experience, people attracted via these programs are bargain hunters and will continue to go where the deals are. Once you stop offering them the deal - they move on to the next one. For example, we had a guy in a couple of weeks back laughing about a car wash that sold him a "3 month pass" for $99.95 or something - unlimited washes. He told me he literally went 5 times a week minimum for the entire 3 months and as soon as the deal ended he never went back. Coincidentally - the car wash went tits up a couple of weeks ago.
Do you guys have any suggestions on cleaning wheels and tires efficiently using a vapor steamer? That's probably the only thing I see slowing my helper down. I don't plan on making much off these deals, I just want to use the money I do get from the deal to invest back into my business right now.
safetyman2010
New member
jose206 said:
Then why bother doing it? Makes no sense if you don't have an end game here that will benefit your business. Being busy is not the same as being profitable.
Richard Grasa
New member
I've done two deals with living social. I did them because I'm a new business and located in the back of a building with no drive by traffic. If you are an established business and have a customer base already, you don;t want to do one of these deals. If you want to get hundreds of people in the door with no advertising money up front, then this is a good thing to do. But you need to make sure you can handle all the deals you will sell, there's no way I could have done my deals if I were mobile or had no help at the shop. Every penny I made on the deal went to pay my help to do all the details. But I now have a big database of happy customers that would have normally taken years or thousands in marketing otherwise, so it worked out very well for me. I'm starting to see the word of mouth and repeat customers now. One huge problem with these deals is that ALOT of people procrastinate and want to get in at the last minute. I had to extend my expiration date on my first deal to take care of everyone. Not that I had to, but I did anyway. Doing all these deals for no profit will burn you out. Even if you have help. I am glad I did those deals, but if they called my tomorrow and asked if I want to do another one, I would say hell no. Another problem was they will tell you your deal is going to run in 3 weeks and 2 months later you're still wondering when your deal is going to run. It can really screw you with trying to plan things. There's alot more I can write about this but I don;t have time right now. You can feel free to PM me if you have specific questions. Or put it here, but I don;t always have time to look at the forum, too busy doing living social details.
I've tried living social and groupon and what I've found is that the customers were definitely bargain hunters who won't pay full price for your service (as a repeat customer) once they've purchased it at a discount price. I've also come to see that these bargain customers have the filthiest cars. It's apparent that they don't take care of their vehicles, but saw a great deal on a discounted detailing service and jumped on it. Once the vehicle is clean, they will just start the process of letting the filth build up again.
We did it to drive traffic to our website and for brand awareness. So, I think you have to consider your reason before proceeding. These daily deal customers take up a lot of time and resources and I would never consider doing another one after my experiences.
We did it to drive traffic to our website and for brand awareness. So, I think you have to consider your reason before proceeding. These daily deal customers take up a lot of time and resources and I would never consider doing another one after my experiences.
I went ahead with it and there sure are some serious bargain hunters. I don't blame them, I'm guilty of that myself but man it's tough trying to please some people. I've gotten asked what difference there is between what they paid for on the deal I ran and what they can get done at a local car wash chain. I try to help them appreciate that I use steam to wash their cars whenever possible and my interior wipe downs are done with steam as opposed to a rag with chemicals. I'm just going to try to take care of as many as I can while I have the time so that when my regular paying customers start calling I'll have the time for them.
The Wraith
New member
The problem with Livingsocial and Groupon is they don't create repeat business. It's harder to find new customers than it is to get repeat customers. The types that buy into these programs will not be repeat business! Would you pay full price at the same fancy restaurant if you knew every few weeks they would offer one of these deals? Don't think so. I've seen too many amazing businesses with the right concept go out of business because of this plan. This is why you get notifications from Groupon and Livingsocial when the business you buy into goes...well.. out of business.
The Wraith said:
It isn't up to them to create repeat customers. That is the businesses job. Yes, you will certainly get some bargain shoppers that will not come back but I guarantee that you will get some who just never knew you were there and have been looking for a place to go.
You have to look at these deals as a marketing expense, not lost revenue.
I did a Living Social deal last year. Over the two days the deal ran it generated an extra 900 hits on my website. Normally I get ~40/day. I've also gotten repeats from the deal and second and third cars from people who bought the (one) deal. Most of those that bought are local to me and never knew we were here.
It isn't for everyone and you have to be careful in how you handle it but it can certainly work out in your favor.
MichaelM said:
I have been told that the percentage that you discount your services can be used as a tax write off against earnings because it is considered a marketing expense. Tax laws obviously differ by province/state but it is something you may want to look into if you have run a deal.