Case Study: Rural Town's First Taste of Deals | Street Fight

Case Study: Rural Town’s First Taste of Deals

Case Study: Rural Town’s First Taste of Deals

Groupon and LivingSocial are popular marketing tools for local merchants, but they aren’t available in many small towns throughout the country. That’s why Ryan DeJong, founder of the gooroo group marketing agency, used Closely to create a series of daily deal offers for the Pineapple Day Spa in Pine Bush, N.Y., (pop. 1,780). DeJong has found that small town customers are just as eager to jump on the daily deal bandwagon as their big city counterparts, and that customers are more responsive to limited-time deals than the generic discount codes spas typically send out in email blasts.

What are some of the challenges salons and spas face when it comes to marketing?
In the salon and spa world, most business owners are not born out of a business degree or a business world, they are born basically from a cosmetology degree or a license. In my family, the [Pineapple Day Spa] was born out of my aunt being a hairstylist. She got thrown into running a business, but could never imagine how to really use marketing tools without first going back to school. Using spa software is one thing, but learning how to maximize it is another.

Can you talk a little about how you specifically used Closely? What kind of deals did you run?
I got in early with them, which is really great. The platform was still being tweaked, tuned and perfected, but I could already see so many different ways to use it. I used Pineapple as a test case to try all the different features and see how the platform could perform for a small business, and the results were shocking in a positive way.

The unique thing about Pineapple is they are up in a very rural part of New York. It’s a place where there are about 1,600 people in the actual town itself, and the demographic is actually spread out 30 to 40 miles. It’s a very rural area with two stoplights in the town. The challenge up there is that there really are no daily deal platforms in that market. The clients aren’t familiar with the platforms; they’re not really familiar with what daily deals are. When we were asking a bunch of [Pineapple] clients whether they use Groupon or LivingSocial, they’d vaguely heard of them.

What we were excited to test [with Closely] was whether a market that has never seen a deal platform would respond to it the same way a market that’s familiar with deal platforms would. That was proven in the first deal that we ran. People were viewing [the deal], they purchased it, and they got the hang of it. From that point on the momentum picked up. Every time we run a deal people are excited about it. They ask about it now and ask when the next deal is going to run.

Had you been using anything for marketing before Closely?
The software that the spa uses provides online booking and it provides a platform for special offers and promotions. We’ve been doing that with SpaBooker from GramercyOne since 2009. We’d send out special offers via email or put a special offer code on Facebook or Twitter, and then [clients] would be able to book online and receive the special offer when they came in.

That worked very well for us, but what we were excited to see [with Closely] was whether we could actually generate more revenue and more response by offering a deal voucher as opposed to just a special offer [code]. That was the biggest difference in our marketing concept before and after using the deal platform. [Closely gave us] an immediate generation of revenue. [We can] actually see how many people take advantage of a deal because it’s only running three or four days. We’ve been able to produce more revenue than we ever had by just offering a booking code.

For instance, [let’s say] you offer 30% off a massage. If we offer a booking code in an email blast—which we’ve done—and then we also send out the same [discount] but with in a voucher [form], then we are able to see a higher response [with the voucher]. There’s more of a call to action. With a voucher, the [client] can buy it and they don’t have to book it right away. If the voucher expires in two weeks, they still have two weeks to book it. That’s what we saw our clients responding to. They were excited because it took the pressure away from booking and committing to a date and time, but it still allowed them to take advantage of the deal.

How are your Closely deals distributed?
As soon as we send out a deal it is literally going to everybody in multiple fashions: email, Facebook, Twitter, and on our website. We use MailChimp and we send out marketing emails to our entire database. We can actually target deals, as well. The cool thing about the technology that’s available today is that we can actually go in and segment our database. Say you know you want to send a deal for facials to everyone that’s coming in over the next month for massages. By using a platform that actually allows you to sort your database and run reports, you can send out targeted emails. Obviously if we send an email blast for a manicure, all the men in our email database are just going to unsubscribe. So the targeting of the emails is where we have really found success.

Email marketing is one aspect, and we have a very healthy Facebook presence. We are on Twitter, but Twitter isn’t as active upstate. We also use the [Closely] widget on our website, so soon as we publish a deal, those deals go right to our website. I just modified Pineapple Day Spa’s Facebook page to feature a special offers page, so even if you are on Facebook, you can still view the deal via the widget and buy the deal.

So you’re mainly targeting people who’ve come to the spa before, versus first-time customers?
Yes. Pineapple Day Spa has been in business since 1996, and before that it was actually a hair salon, so we have a huge database of clients. Because it is a smaller demographic, what we realized was that we didn’t have to go get new clients. We’ve got enough that have been in before. We would love to get them back again, and we also want to increase the frequency. We are able to send out deals to people that have come in for facials, to get them to come in for a spa service or waxing. We use these deals for two primary things: more attention and getting clients to come back again. Also, to increase customer frequency. And it has worked.

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This interview has been edited for length and clarity.