Given that it’s Yoga Week at Teambuy and that Yoga deals can be found on several deal sites on any given week, we thought it apropos to discuss an issue that will cause some strain in the Daily Deals industry as it pertains to Yoga studios.
There are many popular categories or types of deals offered through Daily Deal sites. Businesses that have low variable costs or high fixed costs are attractive candidates for Daily Deal promotions. Classes, for instance, are such a category. Yoga classes, more specifically, are very popular.
There are hundreds of Yoga studios in larger cities and, therefore, a large amount of possible Deal campaigns that can be offered to the public. Consumers love these Yoga deals because, well, Yoga can get pricey and purchasing a Daily Deal promo for a Yoga studio or class enables these consumers to enjoy an activity they love at prices they can more afford.
Now, how about the merchant? Do they love these deals? Depends. Like most merchants, some Yoga merchants benefit greatly from promoting their studio or classes through Daily Deal campaigns and other don’t. Let’s all remember that a “Daily Deal” campaign is exactly that, a campaign. Just like a TV spot, a radio ad or magazine ad. The main purpose is customer acquisition first and foremost. What each Yoga studio owner does with that customer acquisition varies greatly.
Apparently, one Yoga association operating out of Toronto (this can be a national association or local one…we are withholding the name for now) wants to help Yoga studios decide what to do with customer acquisition as well. It is about to offer it’s Yoga studio members a serious ultimatum. Here it is: If you wish to remain a member of the association, you must NOT run or promote your business through a Daily Deal site. No exceptions.
Now, I realize the concern that an industry association must have concerning the daily deal industry as an alternative way of marketing for Yoga studios. (lower industry margins, consumers not being loyal, customer service issues, etc) I get it. But who gave them the right to determine how best a business should or should not market themselves? Their ultimatum is not only unfair to Yoga studios but it clearly lays blame to the wrong element. The issue here is not the Daily Deal promotional campaign…they clearly work. They issue is how the Yoga studios choose to promote themselves, the offer they use to attract customers, the customer service issues that exists during these promotions and the fact that many Yoga studios, like many merchants, are not doing a good enough job leveraging the customer acquisition acquired from deal sites and turning those consumers into repeat customers.
It is easy to blame the deal sites, branding them the culprit to all the issues merchants have. Quite frankly, that’s a cop out and removes the accountability to the local merchant. Local merchants, Yoga studios as well, need to take responsibility for their business and how they promote it. The Daily Deal sites did their job in getting customers through the door. Now, what can the merchants do to keep those customers? Many merchants do not have the answers. Here is a start:
- run smarter offers: offers that promote trials or repeat visits instead of killing prices on your main menu items
- have limits on the amount of vouchers sold, basing it on capacity of your studio and not your capacity for greed
- have a process in place to turn first time buyers into 2nd & 3rd time customers..leading towards repeat business
- negotiate better among deal sites. (there is no reason to give 50% anymore…depending on the deal site, it can be as low as 30%..but expect to give more to larger or better quality deal providers)
- Yoga studios should work with their industry associations to perhaps negotiate better terms or training with the deals industry or with specific deal sites.
Stopping Yoga studios from running attractive promotions is ridiculous. Any Yoga studio, if they had the money, could just promote themselves on the radio or TV or in print and offer something spectacular to the consumer…will that be “allowed” by this Yoga Association? Will this association “allow” Yoga studios to promote a great offer on their Facebook page? On Twitter? The only thing this ultimatum does is hurt the smaller Yoga studios that cannot afford radio, print or other forms of advertising that actually reach a wider audience.
The power of the Daily Deal promotion is not in the promotion itself, rather it is the combination of the great offer + that offer being promoted to a large database + the fact that the promo is at no upfront cost. This combination helps Yoga studios compete. The larger studios or chains are loving this ultimatum decision…the Yoga Association is essentially helping to put their smaller competitors out of business by stopping them from advertising in a competitive manner. Good luck with that.
Recommendation for Daily Deal companies:
- take the initiative and work with Yoga associations (Restaurant and Spa associations as well).
- Develop a training program for Yoga associations to share with their members
- Develop promotional parameters with the association so they can share it with their members
- Don’t leave it up to these associations to dictate the rules of how merchants can work with you
Although customer service from certain Deal sites need to significantly improve, the majority of merchant issues surrounding running Daily Deal promotions are caused by unprepared merchants. Whether they are unprepared to negotiate with Daily Deal companies, whether they are unprepared by promoting an offer that does nothing to capture repeat business, or whether they just could not handle the volume of traffic after running a promotion. These are all situations that can be managed far more effectively by the merchant. As such, this Yoga association should focus more on training and marketing services to its members instead of forcing them into a bad businesses decision.
Stopping small merchants from having options to compete or from marketing options is never an idea worth pursuing.