Erik Bostrom, owner of Hand & Stone Massage and Facial Spa in Highlands Ranch, placed a 60 percent-off coupon for a hot-stone massage with Groupon in August.
He was just hoping to attract a few new customers. But within 24 hours, he sold 1,288 of the deals, far more than even the trendy national couponing site told him to expect. He had to ask staffers to work extra hours. And it’s become harder — though not impossible, he insists — to book an appointment at his spa.
Still, Bostrom said the promotion, at best, is break-even financially. That’s because the Groupon purchasers who do return at full price do so at a lower percentage than Bostrom’s regular clientele. They also purchase fewer goods and services than his ongoing customers.
Bostrom remains happy with the deal, seeing it as a form of marketing that has gotten more potential repeat clients into his location than any print or broadcast ad ever could. But his story illustrates the conflicting views that businesses have about participating in the new wave of cut-rate Internet discounts that could fill a business without necessarily increasing its profits.
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Photo by Kathleen Lavine, Denver Business Journal.