If your business is using Groupon or similar deal sites to reach customers, chances are you’re looking for an opportunity to increase revenue.This can happen in one of two ways:

1) A one-time spike in sales in accordance with the volume of deals sold.

2) By converting new prospects into long-term customers who will continue to purchase your product or service, providing a steady increase in revenue.

Which customer would you rather have?  Do you want someone walking out of your door unlikely to ever return, or someone who had such a great experience they can’t wait to come back (and likely tell their friends about it)? And, thinking of your customer, which one would you rather be – one treated like a one-time cash source or one whose business relationship is valued?

My Groupon experience…

In the past year, circumstances where such that I found myself needing to find both a new hair stylist and a new massage therapist.

To do so, I decided to turn to Groupon as a way to find a new matches while saving a little money on services with new vendors. My experiences were like night and day, and it got me thinking about the vendor-customer relationship in these scenarios and what it takes to put together a successful formula.

In one instance, I was treated like a valuable prospect and potential long-term customer…in the other; I was treated like a cheap deal-seeker there to take advantage of anything possible never to return again – not a good way to earn my repeat business.

(Here’s the longer version of the story…)

Via my Groupon purchases, I found a massage therapist right away and have returned several times…in fact, I think it’s fair to say I’ve become a client. I still, however, am in search of a hair stylist.

The first stylist I visited via a Groupon purchase greeted me by asking if this was my first Groupon or if I use them often. I felt like I should have a scarlet, “G” sewn upon me somewhere.  The quality of her work was acceptable, yet throughout the visit, I was consistently reminded that I wasn’t paying “retail price” and was repeatedly told about her additional offerings, asked to like her (three different) Facebook pages, and told that’d I’d be receiving emails about future promotions. (And wow…those are still coming at a rate of about three per week.)

Unimpressed, I tried again and purchased a Groupon for services at another salon. Upon making my appointment, I was told that the Groupon only applied to their most junior stylists. Ok, fine. I understand that these are the people who most need the business. When I arrived, a young woman introduced herself and asked for my Groupon. (Again with that scarlet letter.) But fine, she’s the receptionist and that’s her job, right? Well, turns out she was the stylist. She led me to her chair, proceeded to cut my hair almost as though I was keeping her from somewhere she’d rather be, and said goodbye without offering her card or asking if I’d like to schedule another appointment. The end.

Ok…third time’s a charm, right? I purchased another Groupon for a salon very near my home thinking this was going to be IT. I called to make the appointment and was told I could select any stylist (at any pay scale). I was very intentional to select a seasoned stylist that was still within my budget, considering that I truly hoped I’d be a customer for life.

At the appointment, I was saddened (but at this point, I half way expected) to be asked, “So…do you purchase a lot of Groupons?”  But this time, I was prepared! I told him all about how my stylist moved out of state and I was looking for a new one and that this location was perfect being so close to my home. Apparently, he didn’t take me too seriously. Here I was, practically throwing myself at him as a client and instead of wooing me back, he took the one-night-stand approach, trying to get as much out of me in the moment via up-sells. (Deep conditioner? Product? How about your brows? Here’s my tip envelope – please remember to tip according to retail value.) And, at the end of the appointment? Again, no business card. No asking if I’d like to make another appointment. Just turned and walked away.

Groupon or not, you need to know your customer.

This post in Inc. magazine identifies two “types” of Groupon customers:

The “casual couponer” –
She will act on a coupon or deal to do something that she was planning to do anyway. Think of her mindset like this: brand first, coupon second.

And, the “reward seeker.”
Once a shopper like this uses your coupon, he moves on to the next deal. 

The article goes on to explain how businesses can capitalize on each, provided that they understand their customer, and build “an experience that goes beyond merely making an offer.”

If your business is going to use Groupon, you need be prepared to do more than set up a deal if you want to convert prospects into long-term customers. You’ve offered them a deal to get them in the door, and now you have to keep your end of the deal by providing an experience that makes them want to return.

The massage therapist  I visited clearly understood what it meant to build an experience. She treated me well, and then offered to extend Groupon pricing on additional appointments. (And, both are necessary, right? If I had received sub-par service, it wouldn’t have mattered if the Groupon rate was extended – I would have declined.)

My experiences with the stylists, however, failed to move beyond the offer. Whether it was being too focused on retaining my business that they overlooked any personal connection or care, or too convinced I was only there to take advantage of a deal, they all failed to offer an experience that I’d like to repeat.

In one instance, both the business and I make out quite well. There’s a mutual investment and the reward pays off in the long run. In the second instance, neither the business nor I are getting our value from Groupon and we’re both left with less than desirable experiences.

And…I’m still looking for a decent hair stylist.