Chicago Yoga Studio: "Why I won't do a Groupon"

http://blog.tulayoga.net/2011/08/why-i-wont-do-groupon.html

by awicklander • 15 years ago

63 62 15 years ago

blog.tulayoga.net

klenwell2• 15 years ago

Didn't take long for a Groupon sockpuppet to show up in the comments:

Rachel Baker said...

I think Groupon is a guaranteed and low effort marketing platform for businesses. Every new customer has a cost of acquisition. The smarter and more efficient your marketing efforts the lower that cost. Groupon can be the best thing in the world...

Rachel Baker User Stats

On Blogger Since August 2011

Profile Views (approximate) 7

carbonica• 15 years ago

And:

Unknown said...

Agreed 100% with Rachel's comment above. Also, what makes you think Groupon would even accept you? Top tier deal sites (LivingSocial, Groupon) expect established or reputable businesses. You're too new and unproven to make the cut. You also sound naive in general.

Unknown User Stats

On Blogger Since August 2011

Profile Views (approximate) 4

TrevorBurnham3• 15 years ago

That's really startling. Is this something Groupon employees are expressly paid to do? Is that one reason why their costs are so high?

awicklander• 15 years ago

Rachel is not a Groupon employee. I share of office with her in Chicago. She's a wordpress developer, founder of PluggedIn consulting (http://pluggedinconsulting.com) and a great person.

BasDirks• 15 years ago

great persons can be sockpuppets, but I think said qualification is quite unreasonable.

benatkin• 15 years ago

Oops. I don't know how, but Blogger's commenting system results in a lot of people who are OK with identifying themselves completely on other sites having a profile with only their name. I wasn't sure it was her and I hadn't seen your comment so I asked if it was her on twitter. Then I saw your comment and I checked back and she'd already replied to me on twitter that it is her. Case closed.

OT: I think Google will probably make a major change to Blogger in the next year or two which may fix their identity linking issue. It will be interesting to see where they go.

rachelbaker3• 15 years ago

Thanks, Andrew!

I would never work for Groupon or anyone else - so I would make a very bad puppet. ;) I didn't even mean to sound like I was endorsing Groupon. Groupon = marketing laziness (IMHO)

timjahn• 15 years ago

I know both Rachel and Andrew personally. Neither of them work for Groupon and they, as Andrew explained, share an office in Chicago (with an insanely beautiful view that I'm jealous of!).

And frankly, they both rock. :)

tptacek7• 15 years ago

The top modded comment on this story is an anonymous user directly accusing Groupon of sockpuppeting online discussions citing evidence that is refuted downthread by a non-anonymous HN user. Not OK. This is a form of incivility.

Words matter. If you don't know someone is a paid shill for another company, use words that indicate that.

Jacob4u2• 15 years ago

I respect your trying to bring attention to incivility on HN, but in what way is the user anonymous? Their account seems old enough and has plenty karma to make me respect their opinion.

Also, in my case, the GP expressed the same opinion that I had after seeing those comments on the OP.

klenwell2• 15 years ago

True, I didn't know for a fact that Rachel Baker was a sockpuppet but she sure looked and sounded like one. If she had linked her consulting website profile to her freshly minted Blogger profile, I probably wouldn't have jumped to that conclusion.

Was I uncivil? Some might argue polluting blog comments with marketing pabulum is uncivil. I just thought it was kind of interesting, indicative perhaps of where Groupon invests some of its resources.

rsynnott• 15 years ago

> I think Groupon is a guaranteed and low effort marketing platform for businesses.

Well, one would hope they weren't an _actual_ Groupon rep. This is _not_ the sort of thing that a company trying to IPO should be saying.

rachelbaker3• 15 years ago

Not a Groupon sockpuppet at all. I just didn't have a blogger account tied to my Google Apps account. I am not a frequent Blogger commenter.

gee_totes• 15 years ago

That's exactly the type of response a sockpuppet would post. :)

mathattack2• 15 years ago

And this comes from Groupon's hometown. Ouch!

My impression is that Groupon works better for brining in incremental revenue. A prior HN post on skydiving captured this very well. http://news.ycombinator.com/item?id=2654788 What I mean by incremental is customers who would never use your business to begin with. It also helps if the business is high margin. These businesses tend to have high fixed costs too.

We recently used Groupon for a midweek booking of a fantastic bed and breakfast. Great for them - we'd have never heard of it, and the revenue was largely incremental, while the costs were fixed. Great for us - a B&B when we wanted. Also great for a bespoke suit. ($3000 - a little crazy. But $600 - not so bad)

Yoga seems much more variable cost. A big part of the cost is the teacher. Some back of the napkin (streetfighting?) math suggests a class of 15 people pays $8 per a hour class. Counting prep, set up, and tear down, it takes the teacher an hour and a half. So let's say they make 60. Then it's 60 to pay for the space, AC, etc. Very low margin business. Cutting the revenue by 75% doesn't make sense unless you're selling a lot of add-ons or expecting to convert for long term customers. Both are risky propositions at best.

mturmon• 15 years ago

The post you refer to was a good example of a business that had intelligently thought through whether Groupon was good for them.

Some other special aspects of that case: Due to the nature of the business, the Groupon'ers had to sign in to a slot in the schedule, eliminating the "rush of customers" problem. And, the business had upsell options like souvenir t-shirts to extract some non-discount money from customers.

mathattack2• 15 years ago

Exactly! Groupon is good for some but not all. Same with Network TV advertising. Same with newspaper coupons.

marquis2• 15 years ago

500 groupon customers is a lot to bear considering her calculations, but would it not make sense to offer, say, 50 groupon codes and write these off as marketing costs? Or is there a minimum limit to what groupon will work with you on.

Having said that, I have friends who won't do sushi or yoga without a groupon, which I find fascinating. When I asked would they not return somewhere that they enjoyed without a groupon they replied that there are sufficient groupons in their city to not have to do that. I must be old-school as I believe in supporting your local businesses and nurturing your community rather than saving a few dollars.

silvestrov• 15 years ago

Your second paragraph (sort of) contradicts the first: it says that (some) groupon users will never return unless presented with another groupon. No repeat/loyal customers.

That might be the problem with groupon: the people most likely to use groupons are the ones least likely to become loyal customers and the least likely to effectively recommend your business to their friends because all their friends know they only went there due to the groupon.

marquis2• 15 years ago

Right, it's a double-edged sword. 'Premium' customers find coupons unseemly and wonder why a good business needs to offer coupons (I have this knee-jerk reaction myself, as I didn't grow up in the US perhaps). On the other hand, groupon offers a level of exposure that may be compelling. I think that the yoga studio owner has come to the right conclusion to her - grow her business organically based on quality.

rsheridan6• 15 years ago

Even if they don't come back, it's still better to have the Groupon chasers in your studio. You get paid at least a little bit if they buy a Groupon, compared to nothing if they don't. The marginal cost to a Yoga studio of adding another student is zero.

Of course this doesn't apply if you're running close enough to capacity that the addition of more students will degrade the experience for everyone else, but a lot of yoga studios don't have that problem, especially not at off-peak hours.

georgieporgie2• 15 years ago

I can't think of a worse application for Groupon than yoga. It's a long-term, continuous process. You want a reliable teacher and a relaxing, focused experience you can count on. Having the studio jam-packed with new faces isn't the way to accomplish that.

That said, if they're charging $130 per month, I wouldn't do it without a Groupon, either. That's a fortune for some group exercise.

TrevorBurnham3• 15 years ago

I've actually had this experience: My favorite yoga studio, where I was going 3-4 times per week, did a Groupon; suddenly the room was packed and there was less space to move around in. It would have made sense for the studio to do the Groupon when they'd just opened and desperately needed advertising, but I was baffled by their decision to do the Groupon when they were already running at what, to me, seemed like optimal capacity. They attracted new customers, but they also alienated some old ones. (Though the deal wasn't "New Customers Only," so at least I was able to enjoy the discount.)

OTOH, I moved recently, and a studio near my new place did a Groupon. I probably wouldn't have heard of them otherwise (there are other studios that are closer to me). They did a small deal, something like $15 for a 5-class pass, and they did it at a time of year when they're at less than peak capacity (it's summer and the studio is near MIT). So, I'd say that deal made sense.

(As to $130/mo: Actually, I was happily paying that much at my studio. This studio's pricing seems to be in line with most: $15 for a single class, $130 for an unlimited monthly pass.)

blackguardx5• 15 years ago

$130 is a lot of money, but investing in your health is probably the best investment you can make. Some people spend $130 just on coffee every month.

georgieporgie2• 15 years ago

I'm guess I'm spoiled. I'm used to Mission Cliffs in San Francisco, where a ~$65/month membership got you climbing, cardio, weights, along with spin, kickboxing, and yoga classes.

Honestly, though, I do think the fairly standard $15 per session is way, way too much for yoga. $15 per head with a class size of around 20 is $300 for a one hour session. I visited Yoga Tree (I think) in the Castro once, at an even higher price. The 'advantage' was that the studio was fancier, and they had a couple of really poorly trained lackeys running around making 'corrections'. Honestly, the yoga instruction I got at Mission Cliffs was better, and the instructor bothered to get to know me and my personal limitations.

I agree entirely about investing in health, though, particularly for people in sedentary careers.

xsmasher• 15 years ago

It seems like a great application for a Groupon - an up-front investment by the studio can net a long-term customer.

Coffee shops and restaurants seem less suited in comparison; their product is more of a commodity.

johnrob• 15 years ago

Reminds me of the most recent conclusion I had come to regarding Groupon: it appeals to broken businesses. If you can't get new customers by simply lowering prices (instead of offering a Groupon), then your business is on very weak ground. Leveraging Groupon's email marketing distribution for a one time boost is not going to fix this fundamental problem.

rachelbaker3• 15 years ago

Forget lowering prices, if you cannot get customers into your business than you really need to take a step back and review your current marketing efforts.

What can be done to get more of your target customers in the door - and to keep that up on an ongoing basis?

TrevorBurnham3• 15 years ago

One thing no one has mentioned is Yelp. Yelp is huge for yoga. If your yoga studio doesn't have any reviews on Yelp, a lot of people are going to be hesitant to pony up $15 just to try one class. (Many studios offer a discount for new students, but this one doesn't.)

There's a big overlap between Groupon users and Yelp users, so it's a great way to get a batch of reviews up fast. But that's a double-edged sword, especially if Groupon buyers are going to be packed in like sardines in the studio's first weeks.

Here's what I'd suggest: This studio needs to get a Yelp page up right away, and at least post a message there about when they're opening. They may even want to offer a deal right there: "Mention Yelp, and get $5 off your first class!" That way they'll attract more customers (but not too many), get reviews early, and cut out the discount middleman.

Alex39177• 15 years ago

Her business aside, anyone who joins an organized religion because it's on sale is probably a moron.

blackguardx5• 15 years ago

Yoga isn't a religion. It is basically just a group stretching class. Some people put various "new age" elements into it, but I don't see how it could be considered a religion. I could be wrong though. I've never been to place where people considered it to be much more than a fitness class. Maybe I've been to the wrong places.

Alex39177• 15 years ago

The word yoga literally means 'yoke', in other words basically a connection to god. That's what those stretches are designed to do. It's a form of mysticism, like Kabbalah.

enneff2• 15 years ago

Yoga has a spiritual aspect but you're not paying a yoga instructor for spiritual guidance. You're paying to use their space, to be taught the sequence of postures, and to receive adjustments to better achieve the postures. Yoga teachers do not typically promote themselves as spiritual leaders, nor Yoga as a religion.

Some Yoga schools are more spiritually-oriented than others, but I assure you that the vast majority of people who go to Yoga classes do so for the health benefits alone.

Alex39177• 15 years ago

"I assure you that the vast majority of people who go to Yoga classes do so for the health benefits alone."

I guess I have a lot of trouble wrapping my head around Yoga as a secular activity. Even most if people are just doing it as a workout, it seems like part of what draws people to it is that it gives them some vague feeling of connection with something in the collective unconscious, even if they never explicitly explore its history or its role as a spiritual tool. And even just that in and of itself seems to provide some spiritual benefit.

I have no doubt that people basically just want the benefits of some thousand year old tradition, but packaged in a way that reinforces their preexisting worldview. Which strikes me as absurd, but at least I can kind of understand it. But even still, I think the fact that it's something that people have been doing for thousands of years has to inherently change people's posture, no pun intended.

Chicago Yoga Studio: "Why I won't do a Groupon"

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