Local Businesses Look to Groupon to Attract Customers

When David Leon, owner of David Anthony Salon & Spa in Willowbrook, signed up his business to participate in a deal with the website Groupon, he figured it would help bring in a few new customers.

Boy, did it ever.

By 11:30 p.m. Monday, Groupon was sold out of 500 coupons for one-hour massages at the spa, which slashed the price of a rubdown from $95 to $40.

The bulk of the people who bought the coupon and are now booking appointments are new clients, Leon said.

“This was huge,” he said.

Leon is not alone in his experience. Other local business managers say they have signed on with Groupon for the same reason—to entice new faces into their doors—and are seeing similar results.

Every day Groupon offers several deals in and around major cities across the country. Most deals offer at least a 50 percent discount on services or products—anything from Italian food to skydiving to Pilates classes.

Once Groupon posts the day’s coupons, a certain number of people have to purchase each to activate the deal.

About 600 people bought a coupon for  in Darien that gave them $25 worth of books, CDs or DVDs for $12, said store manager Paul Garrison.

So far about 20 percent of the customers who have redeemed that coupon, sold in March, are new to the used bookstore.

“Even if it ends up being 15 to 20 percent of the customers, it will turn out to be a good thing,” Garrison said.

The deal helped remind old customers to visit The Frugal Muse too—Garrison estimates about 5 to 10 percent of the coupon-buyers have purchased books at the store before but had forgotten about it.

When the store first considered whether to do some sort of coupon, Garrison said he looked into other sites that facilitate deals similar to Groupon. All of them take about the same cut of the profits from the coupons’ sales, so Garrison decided to go with the company that had the best name recognition.

Profit margins are already low at the discount bookstore, and Garrison said the Groupon deal cuts into it further.

But profit is profit.

“The fact that there’s any pure profit is enough to justify doing it and getting customers through the door,” Garrison said.

For  manager Cindy Hall, the Groupon deal has been a way to both bring in new people as well as reward loyal customers.

In mid-April, Groupon sold 278 coupons that offered customers $30 worth of food and drinks for $15. The only rule the Darien bar set up is that liquor fans can’t use the coupon on $1 drink specials.

Nobody seems to be complaining.

“It’s a good value,” Hall said. “Now we hope all the new faces come back.”

Some news reports have depicted small businesses, particularly ones in the service industry such as Leon's salon, as overwhelmed by the quantity of customers brought in by Groupon deals.

Not so for Leon. While he's booking his massage therapist's schedule solid, Leon's finding ways to squeeze everyone in.

The massage deal was somewhat of a test run for a future Groupon deal, since it’s a simpler process than other spa or salon treatments.

Next up, Leon said, is haircuts.

“We’re getting the staff ready,” he said.