Is this a bad business idea?

1/13/2009:

Last week, Hoboken411 reported there was some fishy business going on at Mesh Spa.

They closed abruptly without notifying customers. However, they indicated that “water damage” was the reason why they closed for “renovations.” Whether or not they re-open or when, is irrelevant for this story.

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Jersey City spa tries to capitalize

The Spa at Port Liberte recently announced some kind of “special” for those currently in possession of a Mesh Spa gift certificate – offering “discounts” that are valued up to 75% the total value. Sounds generous? Maybe – but do the math and realize what you’re getting into:

Basically – they’re offering 25% off three services if you surrender your Mesh Spa gift certificate.

Example: You received a $100 GC to Mesh. Take 25% off your first massage ($100-$25=$75), 25% off your second, and 25% off your third.

Your $100 gift certificate now cost you $225! WTF!

I think this is a poorly executed idea. While it’s always nice to receive a discount for services – not everyone is necessarily in the market for luxury services like this. The beginning of the year, after the holidays – is usually a slow time anyway – why not just offer those 25% discounts for every new customer during the month of January?

If anything – make the deal for Mesh Spa gift certificate holders almost too good to turn down. Your “objective” should be to get new customers in your spa – and hopefully win them over. A mediocre discount – and multiple visits to “redeem” that gift certificate is way too complicated. How about a single 50% (or more) discount for Mesh GC holders? The purpose of the gift certificate was to give someone a FREE massage… having them pay almost full price pretty much defeats the purpose – especially since this spa is outside of Hoboken!

C’mon people! Have you not seen the state of our economy?

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16 Comments on "Is this a bad business idea?"

mooshu
Member
mooshu

The whole promotion just reeks of unnecessary complications.

Also, I’m gonna pass on Biffy’s offer. Cute, but I’ll pass! 😆

swimfan
Member
swimfan
[quote comment=”127459″]you are right 411!.. they are not trying to attract the customer who wants only one massage..! but who can blame them…? Isn’t that every businesses’ goal …to have repeat business? .. alienating what customers? this spa is the only spa so far that is willing to even honor anything …! so what if its only 25% if you only go one time .. beats having nothing at all! it may have not been enough of an incentive.. but bad business idea? i don’t know about that. but i will say this… bad business is closing your doors all of a sudden.. having your phone say it is disconnected.. (if they did have water damage.. you can always forward your calls or have a answering service..not have your phone disconnected. It sounds little strange to me.) then put up a sign saying you are closed for “renovations” and then say its water damage? i thought it was renovations? not emergency repair. So 411 y don’t you say something about that as bad business instead?[/quote] Exactly. That’s what I was saying. It doesn’t make sense for them to try and attract customers who will only go once. Of course they want to create what we call in marketing a “loyalty program” rather than a one time discount. The people who only want one massage are not the target audience. So is this a bad business idea? Absolutely not. Bottom line – they are offering some discount to people whose gift… Read more »
MidnightRacer
Member

I think my alternative offer would make for greater promotion. It would only cost them a fraction which they could recoup in write-offs for promotion. And everyone’s the better for it. But they can feel free to manage as they wish.

And you do have to go there three times to redeem the maximum 75% of the value from the competitor’s G.C.

bc2000
Member
bc2000

you are right 411!.. they are not trying to attract the customer who wants only one massage..! but who can blame them…? Isn’t that every businesses’ goal …to have repeat business? ..

alienating what customers? this spa is the only spa so far that is willing to even honor anything …! so what if its only 25% if you only go one time .. beats having nothing at all!

it may have not been enough of an incentive.. but bad business idea? i don’t know about that.

but i will say this…

bad business is closing your doors all of a sudden.. having your phone say it is disconnected.. (if they did have water damage.. you can always forward your calls or have a answering service..not have your phone disconnected. It sounds little strange to me.) then put up a sign saying you are closed for “renovations” and then say its water damage? i thought it was renovations? not emergency repair. So 411 y don’t you say something about that as bad business instead?

beamrider9
Member
beamrider9

[quote comment=”127454″]Reading their website seems as though they want you to come in 3 times to redeem the freebie gifted to you by a friend from a competitor. In the end, instead of getting a massage for free, at no cost to you, paid for by a friend, you have to fork over $225 for 3 $75 massages (or services).[/quote]

You make it sound like you have to go three times to get any value, which is clearly not true.

But seriously, you should call the Better Business Bureau and complain. “How DARE they not be more generous with their promotions!!”

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