Groupon, Groupoff

Spa directors speak the word “Groupon” with the same distaste that they once reserved for “Yelp.”

I don’t think the barrage of social media discount ideas will stop anytime soon. And, as ever, there are great ideas to be gleaned from companies that we love to hate.

First of all, the Groupon “concept” is much too easy to rip off, so competitors are pecking away at Groupon, and dissapating the marketing energy across a zillion little discount operations. I think that’s a good thing–there’s potentially some “discount fatigue” happening out there.

We know the hardcore discount shopper will never tire of Groupon and its ilk. And your core, loyal customer of a spa may wander…once…and return after they experience the hot mess that spas become when they’re inundated with hardcore coupon action.

It’s not just customers who experience offer fatigue. The employees of spas that are accepting coupons are requiring their teams to accept discounted compensation. That might work once in awhile, but as a lifestyle, it drives away good staff. Even when employees are allowed to opt out, a spa that’s groveling to Groupon is not a paragon of team spirit.

Groupon’s simplistic nature makes it an easy target for another competitor: you and me. A colleague forwarded me a brilliant promotion (the link is no longer valid) from the Intercontinental Spa in San Francisco. Sexy: a 55% discount on Valentines gift certificates. The actual offer is $20 for $45 worth of spa services.

Of course, an entry level hour massage at this very nice hotel spa is going to run $120. That $45 gift certificate can only be used once, and you can only buy one. (And actually, you have to be new, or having a service for the first time.)

So the come-hither 55% discount is there in the e mail subject line, and the offer is irresistible, but to get a $120 spa treatment, you’re going to spend some serious coin: $95. The $20 you paid for your $45 certificate, plus the $75 balance after that $45 is deducted.

But wait, there’s more!

The Intercontinental didn’t have to pay a company to sell its services at a discount, so in the end they’ve simply discounted by 21%–provided the guest only enjoys one hour long service on that visit. If the same guest enjoyed two services the effective discount drops further.

No, they probably don’t have thousands and thousands of discount-mad people on their e mail list to send this offer to. But I’m guessing they have more than enough to accomplish their marketing goal.

Happy Valentine’s Day, indeed.

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