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Groupon for Wedding Vendors? Not!

November 10, 2010 By 9 Comments

There has been a lot of chatter about Groupon and wedding vendors since the Knot launched Wedding Channel.com Deals.

On the face, it looks like, “WOW, I can really increase my sales with this new marketing tools.” You may want to take another look at that.

The main premise of Groupon is to increase traffic to your brick & morter store by offering deep discount coupons, ususally 50% or more. Add to that Subtract from that the 50% of the final sale price that Groupon takes and you end up with only 1/4 of your normal selling price. Dang, I hope you have some huge margins. If not you are paying people to take your stuff.

Now this works in theory for places like restaurants and spas where they make some money on add-on, plus they are great candidates for repeat business. If someone comes to their establishment for the first time only because of the deep discount but discovers that they really like the place they may very well come back or-double score- become a regular.

So you can see how taking a loss on the initial sale may be worth it. How could this possibly benefit a wedding business?

Hmmm, wedding planner charges $1500, offers a coupon for 50% plus the 50% of that which goes to Groupon and the planner now is planning a wedding for the robust payoff of $375. Woohoo!

One more thing to think about, he/she isn’t going to do this just once. The way these things work is that the Groupon only becomes active after it reaches the tipping point. So say the tipping point is 50, now you get to do 50 weddings at the price of $375. Ya, that is going to do wonders for your bottom line.

When the sales rep from The Knot comes calling about Deals on WeddingChannel.com, you need to REALLY look at all the details and run the numbers for yourself.

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About Christine

Wedding Market visionary and trend tracker. Tips, tricks, trends and web design fresh from the treehouse.

  • http://PositivelyWed.com Dina Eisenberg|PositivelyWed

    Hey Chris, I just finished writing a post for next week about the profitability of Groupon. Turns out it’s not a simple A+B+C calculation. There are numerous factors that can impact your success.

    For instance, you’re right that even if you get lots of purchasers, your wedding biz might initially be losing money on the deal. One of the counter-intuitive factors is that the number of people who don’t redeem your coupon can have an impact.

    While I won’t categorically say it makes no sense for every wedding business, I would say be cautious. Study articles like the one in my blog post Wednesday. And, for goodness sake, be sure you think of this as a part of you long term marketing strategy, not a quick cash infusion.

    Warmly,
    Dina

    PS I’m thrilled to part of the Ultimate Bridal Attraction University with you!

  • Hitch’d Design

    I agree that the Groupon model you describe above is clearly not a smart business decision. However, I do think this model could be beneficial to wedding retailers selling shoes, dresses, and the like. Could be an excellent way for retailers to rid themselves of inventory or whatnot.

  • Bill Norton

    I agree giving away professional services is not a good thing and that is what Groupon and now The Knot is promoting. This might be good for brick and mortar, but most of the businesses I consult with are not real happy with the Groupon deal.

    If you don’t value your services or your time that’s up to you, but don’t devalue the others in your profession.

    The mentality that is created around discounting wedding services is not good for any one who provides wedding services, it just devalues the industry as a whole.

  • Ryan Fox

    I have heard about this on Flickr. Several photography vendors got burned when their super cheap deals were bought by the hundreds, thus subjecting themselves to lower-minimum wage work for several years.

    I don’t understand how a photographer could work for 25% of their normal price and make a living.

  • Anonymous

    Without the advantage of repeat business (we HOPE our clients are not repeat customers for their own sake), this model just doesn’t make sense. It cheats those couples who pay full price, and cheats the vendor who has valued their service (note: service, not product) at a certain price point. There are ways to drum up interest in your services, we just don’t think this is it.

    You pretty much nailed it in this post.

    Why group buying for weddings doesn’t make sense.

  • Justine W

    Any feedback on whether this would be a good option for a wedding planner who is just starting their business and therefore needs to increase awareness?  If not priced too low, this would seem like the perfect opportunity to just let the masses know about your business..and hopefully, while you won’t have repeat visitors- through word of mouth, it might be a good first boost.

    Any thoughts?

    • Anonymous

      Justine, you really should think this through. If you want to use this to promote your business, you do realize that you will be promoting it to mainly the clients that can’t or won’t pay full price. Is this really the tribe you want out there evangelizing about you? You might as well just use Craigslist.

  • Pingback: Are Groupon Style Deals good for wedding Vendors

  • Anonymous

    UPDATE: I just found this article that offers thoughts on Groupon and affluents and offers alternative ideas to using Groupon to market to affluents.
    http://www.mediapost.com/publications/article/167613/theres-groupon-and-then-theres-good-will.html#reply