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Why Social Spending Makes Sense for Healthcare

Marianne Aiello, for HealthLeaders Media, October 20, 2010

Deal-of-the-day social spending websites such as Groupon, LivingSocial, and BuyWithMe have quickly become top online destinations for when you want a discount on Yoga classes or $30 worth of Indian food for $15. But now, some healthcare organizations are experimenting with using these companies to offer discounted elective care to local patients.

If you're not familiar with these social spending sites, it may be because they haven't hit your market yet. Groupon, the most popular of these sites, launched in 2008 in Chicago and soon expanded into Boston, New York City, and Toronto. Now, the company serves more than 150 markets in North American and 100 in Europe, Asia, and South America. You the complete list of cities at http www.groupon.com/cities.

"Groupon negotiates huge discounts on popular local goods, services and cultural events," according to its website. "Then we offer the deals to thousands of subscribers in a free daily email. The deals are activated only when a minimum number of people agree to buy. So our subscribers get a great deal and the business gets a ton of new customers. Win-win."

Last week, The Balitmore Sun wrote about Katzen Eye Group recent Groupon deal offering an eye exam and glasses for $50.

"The timing was right so I jumped on it," Monica Dillon, a Baltimore-area accountant told The Sun. "I'd be more cautious about laser surgery or hair removal. That would take more research. But this worked out; they found a problem with my prescription."

For Katzen Eye Group, offering a discounted service paid off by getting patients in the door who may otherwise never have even heard of the practice. And other healthcare organizations have similar thinking when it comes to social buying.

"In the past year, Groupon has offered a growing number of deals for eye exams, teeth-cleaning and whitening, electrolysis and chiropractic services," The Sun reports. "Approximately 15% of Groupon deals nationwide are for health care services, says Julie Anne Mossler, a company spokeswoman."

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2 comments on "Why Social Spending Makes Sense for Healthcare"


Will Pareja (10/20/2010 at 4:45 PM)
Indeed, Groupon is a class act idea and company. As consumers, my family has benefited from some of the deals and look forward to more. However, as a marketing coordinator for a local pain management group in Chicago, I am not ready to pull the trigger on Groupon as part of my mktg mix. What didn't seem to be conveyed in the article is that companies like Groupon make their money by taking a cut of whatever comes in. When I looked into w/ Groupon, they were going to take 50% income of Groupons sold. Since we offer elective procedures such as cosmetic laser hair removal and skin rejuvenation, I thought this would be a good area to expose to the public. If (for instance) we normally charge a $100 facial treatment, we would offer it at 50% to attract new patients, right? Yep. I'm charging $50 for a Groupon. That is, my prospective new patient will be getting a $100 worth of service for half off. Groupon coffers are ready at my check-out desk b/c they take 50% of the $50. Is that really any kind of win-win? I agree w/ the article in that the exposure provided is nearly invaluable and probably worth of the loss in profit. However, the profitability for biz owners (and in my case small healthcare practices) still begs the question: what percentage of Grouponers will convert to loyal patients or clients? Further, I agree that this isn't traditional marketing and is therefore worthy of testing out. But (as with all marketing ventures), the risk should be calculated and healthcare entrepreneurs should ask if: a) they have the personnel to keep up w/ the barrage of new traffic and b) the exposure will generate enough brand loyalty to outlast the "traffic jam." In the land of the brave and the free, social spending is a worthy option and contender for marketing dollars. It has proven itself a worthwhile marketing risk for restaurants and other industries, but to say that it "makes sense" for healthcare based on a couple of examples is a premature judgment. I hope you are quite right. Thanks for the article! As an aside, check out this article from Chicago's Red Eye newspaper specifically focusing on corporate buying power: http://www.chicagonow.com/blogs/redeye/2010/05/deal-or-no-deal-how-groupon-affects-local-chicago-restaurants.html

Nora (10/20/2010 at 2:56 PM)
This can be a great opportunity for people who might not be able to afford their very important health check-ups or dental exams. I expect to see this trend on the rise. A great site to find deals and sales like these available in your area is http://www.dailydealpool.com. They'll send you a daily email with the best discounts available, ensuring you won't miss out.