Groupon Voucher Scheme

January 15, 2013

Groupon Voucher System


It is some time since I up-dated my blog but I don't see the point of writing just for the sake of it.  But in the last few months I have tried something new for me, though I know other photographers have been doing this for some time.  That is teaching photography outside the confines of a regulated educational establishment.  Many photographers have been affected by the downturn in the economy, and I have noticed that quite a few have turned to offering courses to keen amateur photographers in location and studio techniques or just advancing the amateurs general interest in photography, like night-time photography, or taking pretty pictures.  Quite a few photographers have done so in Edinburgh, my home town. 

For the past few years my income has increasingly come from education, teaching day and evening adult education classes in photography, Adobe Photoshop and computing; as my commercial photography has declined.  My work was in the in-house publications market, photographing company directors, and senior management, for the banks, and large companies.  However, this area started to decline even before the present recession, as much of the previous published work moved to on-line resources and the photography was undertaken by the press manager or keen employees interested in photography. 

So, I moved sideways into education.  But I am still self-employed and all my teaching is based on term time contract work, so I have to find extra income during the quiet months.  The longest quiet time for me is the summer months, when most council run adult education courses come to an end. 

This year (2012) I tried something new, I ran photography courses based locally to me around outdoor photography.  I did this through Groupon for a number of reasons of which I will now tell you about.

I have considered running courses in the past, and have tried to do so with the help of another like-minded person.  We ran a few courses some years back in photography from a room hired from a local college.  But this required payment for hire facilities and advertising.  We found that with these costs the profit for two people teaching was not worth the time or effort and soon stopped the courses.

So, there are a few pointers one has to make at the start: keep your overheads low.  I don't have a studio, so that was one good reason to do an outdoor based course.  Decide on what area of photography you are, or feel you are, strong at and plan the lesson.  Don’t just hope that you can make the course up as you go along on the day – though do be prepared to have to adapt some of the course to what the students wish to learn or already know.  If you do have a studio, then it might be an idea to run the course based in the studio, but be aware that this might incur extra insurance costs, health and safety considerations, age limits, numbers of students able to be in the studio at the same time, etc.  

How to advertise your courses?  The previous courses I was involved with relied on the contacts provided by the college, basically their mailing list.  This proved to be too small, and ineffectual.  But buying advertising in the press was ludicrously expensive, hundreds of pounds for a small advert over two days and could not be justified on the charges for the course we were running. I am sure you are already aware of the cost of advertising.  Short courses, or special limited time offers, often cost more to advertise than they bring in.  This is where I found Groupon so useful.  Admittedly there are problems as well.  But to start with the good points.  Groupon, and the other similar companies, have huge data basis of potential clients that would be extremely difficult for me to access any other way.  They take on the advertising of the course, or other offer you might have, without asking for any upfront payment.  In this way it costs you nothing to advertise, and if you don't have a large enough response for the offer to go ahead, it has cost you nothing.  However, the threshold for the offer to go ahead is usually quite low and given that they are advertising to hundreds of thousands of people, it would be surprising if the offer did not go ahead.

So, how does it work?

You contact Groupon and they will send a representative to meet with you to discuss the offer, and what the offer includes, along with how much they will charge and finally what cut you get.  They will want to make sure you are who you say you are and will check you out.  All their offers are based on a reduction of the original price of around 80%, so your original charge has to take this into account for any offer you are making.  Therefore, if your original offer for a course is £100, say for five people to be on the course, Groupon will probably advertise the course for around £25.  Obviously this is not what you get.  You will be offered around 40% of that price.  There will also be VAT to pay, though that is charged by Groupon when the clients buy the ticket.  If you are VAT registered you can claim it back.

So, this where your sums have to come in.  Are you able to make a profit on £13 per client, when you originally wanted to charge £100 per client?  Do you need to have extra people on the day or offer more days or reduce your costs in other ways? It might be that you offer something else on the day, like a print, which is not included within the original offer, but once the client has taken a photograph they might wish a print to put on the wall.  This would be charged at the usual rate, or, as a special, it could have a premium rate.  In this way income can be enhanced from what would appear on first glance a cheap offer.  However, there might be advantages to taking the hit on your costs. The obvious one is that you are quickly able to put together a client database of your own, though Groupon will not pass on the email addresses of the clients directly to you.  But you could, and maybe should, have a feedback form on the course, or offer, and within the form would be a request for email details.  Or you might offer another add-on for those who attend the course, like a print for example.  But for the clients to claim this they have to email you and, low and behold, you have their email without having to ask for it directly. 

I ran a course for a number of reasons; one, the course was run over a quiet income period, so any money coming in was better than none.  Two, I was able to build up a client database for me to advertise other courses, those on the official adult education list that I teach, and any others I wished to run privately.  Three, it is very good practice to have to teach, or instruct, other people of various levels all in one day.  It keeps you on your feet and as an instructor/tutor helps you to think quickly and find ways of explaining quite complex concepts in a simple manner.  Just because you know how to do something doesn't, unfortunately, mean that you can pass that information on coherently. Often people believe that teaching people is easy and that no knowledge is necessary on how to teach.  But we have all met good and bad teachers and all have had the prerequisite knowledge of their subject, so what is the difference; they all know the same stuff so they should all be able to teach equally well.  If you are considering running courses, then I would advise very strongly that you do at least a basic teaching course and have some understanding of learning styles, teaching styles and planning a lesson.

As I have said already, just because you know something doesn't mean you can teach it.

Finally, planning of the course/offer you are advertising through Groupon, or other offer group, remember that you are likely to sell more vouchers than will be used.  In Groupon's case, if the buyer does not book then Groupon will keep all the money and you get nothing.  I had my clients’ book online through Groupon, thereby negating them having to give me the Groupon voucher, security number or other details.  However, I did have them give me a contact phone number when booking, so that I could contact them directly if need be, such as if they were late arriving I could text or call and tell them where I was or see if it was worth waiting for them before starting.  By having the clients book online I could redeem the voucher on the day the offer became active whether the client turned up or not and so receive my cut.  Without booking online I would have to wait for the client, take the voucher of them and then log into Groupon to redeem the voucher by inputting the voucher security number.  Online the client does this at the time of booking, as all I have at my end is the voucher reference number.  I have to have the voucher security number to be able to redeem the voucher as this proves the client turned up. 

In my case the vouchers sold well, but this does not mean I will have full booking.  However, it does mean making time/days available for those wishing to come on the course or take up your offer.  Initially I did decide to make enough days open for a full use of all vouchers.  Within the first couple of weeks I found that the keenest clients booked straight away, and I was able to start closing days down days that had a poor response.  I did request clients to move from one day to another if there weren’t enough people to justify running the course.  I put on my website that a minimum number of people would be necessary on the day for the course to run.  I decided at least a week in advance if numbers were adequate for the course to run, so that those booked on the day had enough notice to change to another date if necessary.  In fact I found that I had about a three quarter take-up of vouchers sold and in future would open enough days for that kind of number, but allow for extra possible days in my diary in case a higher booking rate does occur.   


Advantages of Groupon or equivalent company:

Large advertising network at no direct cost to you.

Potential for you to create your own database of potential clients.

Income/turnover during quiet times for your business.

A way for a new business to generate interest and turnover.



Disadvantages of Groupon or equivalent company:

Potentially inundated with bookings producing high turnover, but low or none-existent profit.

You having to make time available for clients taking the offer, therefore, potentially, having to turn away full paying clients.

To have a realistic return; either having to take on more clients at one time; or more over a period of time for less money.


Things to consider:

Plan your time for the offer to run and when that will be.  I have heard of a hair dresser who had a Groupon offer, was inundated with bookings at the expense of regular clients.  Be strict about when the offer is open.  If the worst comes to the worst Groupon always refunds the offer to the buyer, but your regular clients are always worth two or three times the value of a Groupon client. 


Be aware that there are people out there who wish to have offers free and pretend to have bought a voucher.  They do this by phoning before the end of the voucher deal period (you should not take bookings before the deal ends), persuading you to book them in and promising to give you the voucher code when it comes in.  (If this is the first time you have run an offer you might get very excited about people phoning and take bookings in advance – DON’T) They turn up on the day, probably a little late and apparently flustered, without the voucher, but promising to phone the voucher details in later when they get back home.  Because they cause a stink in the office, or wherever, you give way and, of course, never hear from them again.  They have had a free offer!!  I had one try this on, but because I had everyone book online he couldn’t book without the voucher details.  He was extremely obnoxious about this and contacted me several times complaining and saying he had never had to book online before and that everyone had taken him at his word when he had booked previously with other offers.  Once the deal closed he never contacted me again.  As it happened he didn’t book, as he hadn’t bought a voucher.


I would strongly advise having an online booking system through Groupon (if using Groupon), so that you make the times available and the client books themselves in.  It also makes it easier for you to redeem the voucher once the offer is active. This also gives you control over when the offer is available and prevents you from being persuaded over the phone (or someone popping in) to make a booking on their terms.  Remember, YOU are making a reduced special offer for your services and as such you must remain in control.


I am not sure you can actually make a business out of Groupon, or equivalent, offers.  I have noticed many photographers will offer a service through Groupon, then a month or so later offer the same again through another similar company, and then another, eventually coming all the way round to Groupon again with the same offer.  Eventually, I would have thought, there will be a point where you either do have an actual service at the advertised price or you don’t.  If you find that your Groupon offer is the only way to have a business, then I would advise finding another source of income, as turnover does not equal profit.  If you have fixed costs, and most people do, and your usual charge for your service is £260 and you are offering it at £9 (I have seen this on Groupon) then something has to give.  If no one is buying at £260 then maybe you are charging too much to start with.  But if you can make the service pay at £9, then the question must be asked, why are you charging £260?   Somewhere your business model is wrong – or maybe, as I suggested earlier, you have decided for a short time to take a hit on profits to raise your profile or create a database of your own.  It is all down to planning.


I hope that the above gives you some idea as to whether it is worth opting for this kind of offer for your services.  Obviously it is based on numbers, therefore wouldn’t be worth it for press, advertising, p.r work, etc, but might be for portraits of family/kids style of work, as well as courses in photography. 






Business 3 - Marketing

November 26, 2011