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Dear Heather,
I attended one of your marketing classes last year and I found it very very useful. Implementing a yearly marketing plan has been working very well for us. Since you have been in the spa industry for a long time, I was hoping that you could offer me some advice about a particular situation that I find myself in:
At the end of last year I partnered with a company called SampleSpa (name changed). This is how the program works: they put together these nice looking cards/ gift certificates that includes a sampler of spa services (a 30 min massage; a 30 min facial; a manicure; and shampoo & style). They print the cards and incur all the costs associated with creating and printing. They then send out sales people out to neighborhoods and businesses and sell these cards for $40 each. Basically, one can get those 4 services (a total value of almost $150) for $40. This is a great value. SampleSpa keeps all the money. We, the spa have to redeem the cards. Each service can be upgraded (to a full hour, or other additions) and the price difference is kept by the spa. In addition, only one service can be used per visit, per week, so it would take someone a full month to redeem the card. The good thing about this partnership was that it brought us A LOT of new customers. SampleSpa sold 400 cards in 2 weeks and then we told them to stop. The bad part (which we didn't really think through initially) was that if customers didn't upgrade, we ended up incurring great losses. Here's how it turned out: a lot of customers did end up upgrading, so in the end we maybe lost $2,000 from this campaign. In return, we got our name in front of more than 300 new people that didn't know we existed (our spa is located in the back of a strip mall, with limited road side exposure, and a lot of people don't even know we are there). From that standpoint, it was good that we got our name out there. Another bad part is that most people that bought the cards were just looking for a great deal and that will probably not come back for regular priced services. (we only realized that once we started redeeming the cards and noticed that 80% of the SamppleSpa clients, even though they leave very happy and satisfied, don't tip!).
Here comes the problem: the gift cards expired on June 1. There are about 100 cards out there that never made it to our spa, basically 100 people that have expired cards. They are now starting to call and want to redeem them. We've been telling then that the promotion ended and that we no longer accept the cards. In an attempt to be even fairer, we agreed to give those people a $40 credit to use in the spa (this is the price they paid for the cards, money that SampleSpa got, not us). We are not in any way obligated to do that, but we've decided to go that route to appease some of the people that are getting mad when we tell them we no longer accept the cards. Still, there are some customers that get very mad. I was hoping that you might have some suggestions as to how to best handle this. I obviously don't want a bunch of unhappy people talking bad about us, but on the other hand, this promotion has already cost us a lot of money and I really don't want to extend it. Plus, these people had more than 6 months to redeem them, but they waited until the last minute to do so.
Heather, please help!!!!!
Thanks so much,
Corina (the eternal people pleaser!)