Small businesses need to look at many different opportunities for growth. Once a martial arts school reaches the point where they are optimized and maximizing their opportunities on marketing avenues such as producing seasonal events, marketing on Facebook, or mastering their social media in general, they must look at other prospects.
One of these opportunities for martial arts school promotion is partnering up with a daily deal provider such as Groupon. Companies like Groupon help promote your business to a large market and work to endorse and sell your services, in exchange for a percentage cut. While this may sound like a great deal to some, Groupon isn’t the right fit for all businesses. Here we breakdown the good, the bad, the ugly, and whether Groupon works for your martial arts school promotion.
Groupon started out in 2008, serving on the principle that a large number of people’s collective buying power could leverage deals or help to create fair customer practices. At its core, Groupon promotes and sells a business’s product or services with an incentive for quantity discounts. A business can see this as worthwhile, if they are comfortable with lowering their margins to sell a large amount of products or services.
This tends to be profitable only for products or services with a relatively low cost of goods sold, as they have to account for the cut that Groupon will take. For membership-based businesses like martial arts schools, this can work well, as the cost of each additional membership isn’t that high. Once that number gets high enough, you’ll have to hire more instructors but the additional revenue should easily account for this added cost.
Not every small business has margins that can afford Groupon’s cut from the revenue of vouchers. While the percentage they take will vary greatly from case to case, some businesses can operate with fairly low margins. As we discussed, margins usually aren’t the issue for martial arts businesses.
One downside of martial arts school promotion via daily deal providers is the risk you run of over-saturating your classes. Unless you have enough potential instructors who can bear the increased load of students, the quality of your martial arts teachings may go down.
One of the worst things using Groupon can do is to ruin the experience for your existing, loyal customer base. Many people who frequent this site aren’t loyal customers of any businesses; they hunt for deals and will be swayed by the cheaper impulse buys. You have to make sure you can handle the volume or only work with daily deal providers who will allow you to set a hard limit on the number they sell. There are plenty of horror stories with Groupon promotions that can ruin businesses and lowering your brand value may not be worth it.
In addition to this, you need to make sure you will not be alienating your current students, based on the prices they themselves paid. While this is always a concern with promotions, Groupon’s bulk approach means a higher number of students will be attending who have a markedly lower class fee than your loyal clients. You will need to decide how to balance the reduce cost with the established membership fees, while also making sure the Groupon deal isn’t be promoted to your students, if at all possible.
While there can be many issues with Groupon, it can definitely serve as a useful tool for some martial arts schools. If you’re good with negotiating the pay cut Groupon takes and you are completely aware of all of the pitfalls and work around them, Groupon can serve as a useful martial arts school promotion, especially if you are a new school opening in a community the owners are not very familiar with. That being said, there are many ways to promote your school; you need to find the ones that works best for you.
Want to learn how to master digital marketing for your martial arts school promotion? Check out our complimentary webinar. If you just need some fresh, new ideas to market your school, check out our blog post on guerrilla marketing for your martial arts school.
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