Friday, March 11, 2011

Groupon

Hope you are having a good week. I have a couple words for you that might make you feel better: IT'S FRIDAY!!!

Things are moving on this very here blog. We have new Monday bloggers. Scott Jackson and JJ Joyce are dentists in Ocala, and they have agreed to share the Monday duties. Both have been avid readers of the blog for a long time. They have both been guest bloggers and have done a great job, so I asked them if they would like to do Mondays, and they both agreed. They have both made it through the rigorous application process and background checks. I am so pumped and I think they are both going to bring stuff here.

I watched Social Network last night. Damn, it was good. I mean, I finished the movie and started looking up all the characters on Google to learn more. It is a must-see.

Okay, today I want to talk about Groupon. Let's be honest - I am dude: I am not an expert on coupons or online coupons. But you would have to be holed up in a cave for a very long time not to know about Groupon. You go online and there are "Daily Specials." Coupons for services. Coupons for restaurants. Coupons for things in your zip code.
The concept has been so successful that Google wanted to buy Groupon for somewhere in the neighborhood for SIX BILLION DOLLARS!!! [Yes, that is billion with a "B"]

In my town right now, they have a $600 laser hair removal for $99 at a spa. They are saying this is an 84% markdown. And the special only runs for a couple of days. A lot of dentists are putting there Zoom whitening on Groupon. You know, a $650 value for $99.

If you are the dentist and you contract with Groupon, this is how I understand it works. The customer pays Groupon, and Groupon pays you 50% of the coupon. That means the spa is getting $49.50 for $600 of hair removal. The laser dentist is getting $45.50 for a Zoom treatment.

Let's talk about the dentist for a minute. Look, we are all trying to get people into our office. I mean, I am thinking of putting on a tooth fairy outfit and waving my wand outside by the street (yes, it is that bad). And we all have to make decisions on how to get people in here. Some people do mail-outs and give a free exam. Some people put an ad in the local magazine. Some people get themselves in a local church bulletin. Some people sponsor baseball teams.

I have to tell you, I have tried them all. But I am opposed to doing the Groupon thing. First, because now people think you were ripping them off before. You have a $600 product that you are now willing to give away at $99? What happened to the person that just paid full fee? They are pissed.

So you do it to just get traffic into your office. You will do a whitening procedure for free basically just so someone will come to the office. You (and I) feel that if you get them to your office that they will be blown away at the service and be a raving fan of the office. They will schedule right then and there for a new patient exam and you will have a patient for life. Right?

Wrong. I have found that people who get a coupon or a raffle prize come in for the service, are wowed by the office, and never come back. They come in for the free exam and never get any work done.

Also, I think you are cheapening the service for every other dentist in the area. I have a friend who runs a home-grown family retail shop and he hates those warehouse stores. Something he sells for $100 is now going for $39 at the f!@#$%ing warehouse store. He buys his product from his wholesale rep for $50; he couldn't sell it for $39 if he tried.

So not only does he look like an idiot when the warehouse store has the product, but now everyone thinks he is ripping them off. We all know that one warehouse store sells an electric toothbrush for less than we can buy them from our rep. HOW DO THEY DO THAT?

Anyway, I am not sold on Groupon. I am not sold about the concept of getting people to come in and seeing if I can "wow" them. As much as I would love for more people to want my services, and as much as I am willing to pay to get people to see my office, I am not going to do it that way.

I don't know. This is just my opinion. What say you? Have you used Groupon? Are you doing more advertising? Is it working?

Hey, have a great weekend. March Madness is here baby, and I am so excited about it. The weather here in Orlando is so beautiful this time of year. I will be outside a lot this weekend.

See you Wednesday,

john

12 comments:

Kallie said...

Friday...yes!! Groupon dentistry...bad idea. We take an ethics class and that seems to violate something in the ADA Code of Ethics

fabfotos said...

You know who else hated the idea of consumers getting the better end of the deal...the music industry. Then what happened, Napster which later leveled out to iTunes. Destroying the old way of making it big with albums.

Do you know why the music industry went from $20 albums to ¢99 songs? Because it was a business model out of wack! People were making millions by forcing consumers to conform with their way...buy the whole album to get one song or don't get any song at all.

The way I see it, Groupon and all the other daily deals sites are my generations way of saying that the business models of the past are out of wack! Regardless of whether you keep $45.50 or $600 dollars for a Zoom treatment, you're still ahead that amount and I'm out that amount. YOU ALWAYS WIN. (unless you pay ME for the Zoom treatment)

So complain and fight the future as much a you like, but just like the music business conformed to a more realistic business model because of what the market demanded, you as dentists will have to do the same or tank.

fabfotos said...

You know who else hated the idea of consumers getting the better end of the deal...the music industry. Then what happened, Napster which later leveled out to iTunes. Destroying the old way of making it big with albums.

Do you know why the music industry went from $20 albums to ¢99 songs? Because it was a business model out of wack! People were making millions by forcing consumers to conform with their way...buy the whole album to get one song or don't get any song at all.

The way I see it, Groupon and all the other daily deals sites are my generations way of saying that the business models of the past are out of wack! Regardless of whether you keep $45.50 or $600 dollars for a Zoom treatment, you're still ahead that amount and I'm out that amount. YOU ALWAYS WIN. (unless you pay ME for the Zoom treatment)

So complain and fight the future as much a you like, but just like the music business conformed to a more realistic business model because of what the market demanded, you as dentists will have to do the same or tank.

gatordmd said...

fabfotos,

Please do not just tell me that you just compared dentistry to the music industry.
Last time I checked there are no dentists that have 50,000 square feet mansions on Malibu beach.
Last time I checked none of the singers have 8 years of higher education.
Come on...this analogy is a real stretch.
I saw an episode of "Cribs" and Jay-Z's bedroom, not his house, his bedroom, cost ONE MILLION DOLLARS.
So can the music industry get a reality check...I think so.

Now lets talk about the $45.50. You say, "We always win".
Well, the bleaching material costs more than $45. Then you forget I am paying the electric and everything else that comes with owning an office for an hour. Two assistants, insurance, all the equipment...etc.
So, no we don't win. We win when that patient comes back and gets more work. But like I said, these types of patients are not coming back. They like the deal and they are not interested in your consistent care.
So pa-lease.

john

ps I am not oppose to the industry changing. I think change can be good but not in this case.

Anonymous said...

fabfotos,
Fine, you can have your one song off an album. But your not coming to my office to get a cut rate bleach job without being a pte of record and getting a comprehensive exam, and periodic prophys WITH EXAM and needed restorative treatment. No ala carte here. It's either my whole album or don't waste my time. Groupons? Yuck

Anonymous said...

Fabfotos,
Your argument makes absolutely no sense. Dentistry and the music industry have absolutley NOTHING in common with their business model. Obviously you feel that your dentist overcharges you. Please find a 'bargain' dentist - and then when you get expired resin, old anesthetic and partially cleaned instruments used on you, you might understand some of the issues that drive the cost of doing GOOD dentistry.
Good luck!

Anonymous said...

In BC groupons are against our code of ethics as it involves a third party who would profit from an interaction between patient and dentist. I'm ok with that. And as you wisely stated, the groupon office is hoping to cash in on the repeat customer that won't ever appear again. So there's no gain for the groupon dentist. Stay your course John.

Anonymous said...

I am all for getting a good deal but the bottom line is you have to still turn a profit to stay in business.

So ultimately you get what you pay for. If the consumer makes out ahead on a deal that is fine but the company regardless of what they do or sell won't be around very long. Look around you today at everything going on.

Anonymous said...

Groupon is making millions, oftentimes at the expense of the small business. I believe it can be a good thing for certain types of retail business, but as dentists we are providing a highly specialized service, not a cheap meal. Groupon will be hot for a few years, then it will die off until the next fad hits....

Randall said...

I stumbled across this while looking for a job post I saw from Groupon a while back for freelance writers. This discussion is missing the most important thing about Groupon. Groupon creates buzz.

Social marketing is dominating every sales vertical out there. Dentistry isn't safe from this marketing shift. Postcards, church bulletins and speeches at grade schools will never reach me, but buzz will. You might counter that you have a blog, but I only found it after searching for Groupon. This means that you're not advertising your blog enough.

Closing thoughts. Groupon, retailmenot, coupons.com and all of the other affiliate marketing type mediums aren't killing you're livelihood. You're marketing efforts are doing that for you.

Thank you for the insight. I'm going to stop trying to freelance for Groupon and start running social marketing campaigns for medical professionals.

Perez said...

Interesting observations! Groupon’s current $25 billion pricetag is flawed for a number of reasons!
Groupon Priced at $25 Billion

Anonymous said...

and for fabfotos: you have no idea what running a dental office is like and the costs attached to it. Even more, you dont know how insurance companies pays us outdated fees and very low prices for our services. You are comparing oranges with bottles... ignorance is bliss.

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