LivingSocial / AmazonLocal / Groupon

I’m wondering what your experiences have been with these “daily deal” websites. If you’re not familiar with them, here is the basic idea:

Business owners provide huge discounts (often 50% or more) on some service or product, in exchange for highly targeted email blasts and display to a large number of people. The buying window is restricted in some way – typically people will have one day up to two weeks to buy the deal, and then up to six months to use their voucher. 

Buyers pay in advance, so the business owner is guaranteed a lump sum of some amount, however small or large that may be. The intermediary (Amazon or Groupon) takes 50% or more of the already discounted price, so the business owner essentially ends up providing the product or service for less than 25% of the usual price. 

I have been in practice for just under two years now and I did a few of these deals in the beginning. I’d like to share my experiences and listen to what other people have done. 

An acupuncturist friend of mine told me he did a deal with Groupon, and more than 300 people bought the deal. I approached LivingSocial and asked to do a deal with them. Because of how the deal was structured, I decided to raise my rates, so that it would seem like more of a deal, and also so that I could keep more of the lump sum. So my initial/followup rate of $125/$60 went up to $150/$70.

The deal was $29 for an initial acupuncture consultation, treatment and half hour massage. After Amazon took their cut, which was 55% plus 3% credit card fees, I was getting a little more than $10 for an hour and a half of work. It seems crazy now, but I was desperate, just sitting there alone in my office with no patients. 

In the beginning, it was great. Nothing is better than having people come through the door. It gives you a chance to show people what you can do and helps you to feel like your time is valuable. 

Also, because of the culture of reviewing that has been largely created and encouraged by websites like Yelp, many people did leave nice reviews for my work on my Yelp page and Genbook reviews page. Many of those people didn’t end up coming back for more than one treatment, which puzzles me. 

I did end up with some short and long term patients out of the deal. I currently still work on some patients from those initial deals that need long term management, but probably no more than 4-5. Other patients came for shorter terms of treatment but have not returned. 

The downsides: 

1. The low low pay. As I mentioned above you will end up getting less than 25%, sometimes much less than 25%, of your usual price. Again, if you’re sitting in your office with absolutely zero or very few patients, this is not much of an issue – you can think of it as part of the cost of advertising. 

2. Deal-shoppers. For every one person that is genuinely interested in acupuncture and is open to becoming a regular patient, there are 2-3 that are simply looking for the latest deal. These deals pop up with increasing regularity, and people in large urban areas can always depend on finding a deal for acupuncture or massage. You are contractually bound to provide the customer with the services they paid for (at a hugely discounted price), even when you can tell they will not be coming back and simply hop around from one place to another. 

3. The psychology of discounts – this is a big question for me. I wonder if offering such a huge discount in the beginning creates a feeling of low value around acupuncture, especially now that companies like Amazon and Groupon do not seem to be spacing deals at all. Sometimes you’ll see deals from a few different acupuncture practices offered on the same day. 

Some questions for Matt (and any others who would like to chime in):

1. Because you have been in practice for 30 years and are well established, I assume you have not done any of these deals. From what I’ve described, do you think they are a good idea for someone with a low to medium flow of patients? 

2. What do you think of the hugely discounted price structure? I am planning on lowering my rates, possibly to something like $79 initial/$49 followup, $39 for seniors age 62+, so that more people can come see me for a course of treatment. If I do this, would it make sense to do another deal with these websites? 

3. Do you think a person who comes to see me via a deal like this will be more likely or less likely to be open to seeing me again? Assume that I will be following your general outline for explaining the treatment process – how acupuncture works by boosting the body’s self-healing potential, estimating the probability of success and effectively communicating that to the patient, keeping track of progress, etc? I realize this may be a difficult question to answer, but any guidance you can give is helpful.

4. If I don’t do another deal, what else can I do to get a large number of people in the door? Or should I not rely on the flood and just try to build out slow and steady? I am almost finished reading your book and am just getting to the marketing and networking aspect. Some of these things I am already doing, and some are new to me. 

Thanks again for all your help, and thank you to the community here on the forum. 

Cheers,

Jonah Ewell L.Ac

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www.jonahewell.com

Hi Jonah – Thanks for sharing your experiences and the questions you asked. I hope some others will join-in the discussion as I don’t have personal experience with using the types of discount offerings you describe. Before getting to your questions, I would like to briefly share some thoughts on any type of “limited time” discounts. I will be showing my age here but I hope it is at least some food for thought.

In medicine in general in the past, it was long believed that it was unethical for those offering medical services to “entice” patients with any sort of special or limited-time discounts. Why? Because the thinking was that people who need medical care should not be swayed into getting that care by marketing ploys – like limited-time deals – that are used to attract customers in retail sales or for elective services like haircuts. If they need to be enticed to seek care they did not really need it in the first place. Medical care is something people need or don’t need and those who provide that care can advertise their credentials or experience and state their fees but should not employ slick marketing tricks to entice someone into seeking care. Patients are not like “customers” in conventional commerce.  

While I always tended to agree with this sentiment, times have changed. Deals like Groupon are much more common today and you will sometimes see medical-type services offered under those types of marketing arrangements. But, even if that type of marketing is no longer seen as being plainly unethical, I would still caution Acupuncturists about the message they send using that marketing. Physicians consider this type of marketing as lowering their status. Acupuncturists, on the other hand, have virtually no status so we have to worry about building our image to at least a respectable level so we might be taken seriously. I am not going so far as to say Acupuncturists should never use these sorts of things but I again think they should be used with caution as they don’t help the image issue Acupuncturists have.  

I think the above answered your first question. As for the big discount, this could be a problem if you are also accepting insurance as I recommend anyone looking to increase their patient-load should do. There are problems with offering discounts on one hand and then not offering those same discounts when you bill insurance. You are not supposed to charge insurance companies more than cash patients and that could certainly also include special limited time discounts.

As for if patients that use those discounts become regular patients or not, I think that again has to do with the image you are putting out there and how you communicate with those who come-in your door. I really like it when a patient comes back to me for a tune-up and relaxation treatment (because they take the least effort), but if your discount offerings tend to mainly attract people just looking for relaxation rather than help for specific medical conditions, that will be a problem. As you stated, I stress that Acupuncturists need to get the message across that we are specialists in improving the body’s ability to help itself and that is why we can be useful in so many different conditions. If you have patients coming in your door for relaxation based on a discount coupon and they don’t tend to return or refer others to you for specific medical conditions, then you failed to convince them you are a specialist in improving the body’s ability to help itself. If they really believed you could do that, who would not want to come back for that or send others to you for that? I hate to say this but my hunch is you are not winning them over once they come-in your door and you should think a lot about that. My book should help you in that regard although you may need to re-read some sections.

Overall – I would tell you that when you are in the office with no patients, you should be working on ways to both get more people in your door and make sure you can then convince them that you can help improve self-healing in many different conditions. Work on your verbal and written explanations of how this therapy works. If you can get better at that, you should see your patient-load steadily increase. Maybe those limited time discounts can be a help by giving a short-term boost of patients coming in your door but the most important thing is how they regard you going out that door. Good luck and keep the questions coming.        

Matthew Bauer