25–35%
Contractual (split rate)
1 Current Deal Structure
| Option | Sell | List | Discount | Merchant Gets | Margin |
|---|
| 60-Min Swedish/Deep Tissue + Oils & Hot Stones | $64 | $100 | 36% | $47.74 | 25.4% |
| 90-Min Swedish/Deep Tissue + Oils & Hot Stones | $83 | $130 | 36% | $59.94 | 27.8% |
| 60-Min Couples Massage w/ Hot Stones | $121 | $188 | 36% | $78.65 | 35.0% |
| 90-Min Couples Massage w/ Hot Stones | $181 | $282 | 36% | $117.65 | 35.0% |
Problem — Split-Rate Structure After Jun 2025 Concession: Solo options were renegotiated from 35% to 25–28% margin in Jun 2025 (contract sell price raised, merchant payout increased significantly). Couples options remained at 35%. This created a split-rate structure where the blended rate sits at ~31%. The YoY change reflects this deliberate contract amendment, not organic option mix shift. Separately, the solo 60-min at $64 is priced 37% below the LV market average sell price ($101) — a genuine pricing opportunity.
2 Market Benchmark — Las Vegas Massage
| Metric | A One Massage | LV Market Avg | LV 30–39% Discount Band |
|---|
| Contractual Margin | 25–35% (split) | 29% | ~31% |
| Refund% | 11.7% | 11.1% | 11.6% |
| CVR | 4.53% | 3.69% | 4.14% |
| Solo 60-Min Sell Price | $64 | $101 | $109 |
Key insight: The solo 60-min at $64 is priced 37% below the LV market average sell price ($101). The couples options at $121–$181 are reasonably positioned at 35% margin. The opportunity is raising solo sell prices — which benefits the merchant directly — not reversing the Jun 2025 rate concession.
3 Proposed Restructuring
- Raise solo 60-min sell price from $64 to $72 (discount 36% → 28% off $100 list) — still well under the $101 LV average
- Raise solo 90-min sell price from $83 to $93 (discount 36% → 28% off $130 list) — proportional increase
- Keep current margin rates unchanged — the Jun 2025 concession was recent (~9 months ago); reversing it undermines credibility. Solo stays at 25–28% margin, couples at 35%
- Keep couples options unchanged — already at 35% margin with reasonable pricing ($121–$181)
- Net result: Both Groupon and merchant earn more per voucher from higher sell prices — a purely merchant-friendly move
4 Estimated Quarterly Impact
Raise solo prices ($64→$72, $83→$93), keep margin rates unchanged · ~125 solo-60 + ~192 solo-90 units/Q
+$788
Groupon GR Uplift / Quarter
~125 solo-60 × $2.03 + ~192 solo-90 × $2.78 uplift per unit
Both Groupon and merchant earn more — no zero-sum trade-off
+$2,132
Merchant Revenue Uplift / Quarter
Solo 60-min: $47.74 → $53.71 (+$5.97 × ~125 = $746)
Solo 90-min: $59.93 → $67.15 (+$7.22 × ~192 = $1,386)
Couples unchanged at $78.65–$117.65
5 Pitch to Merchant
"We adjusted your solo rates last June, and we're not looking to revisit that — your couples options at 35% are performing well, and those stay exactly as they are.
What we do see is a pricing opportunity: your solo 60-minute at $64 is significantly below the Las Vegas average of $101. You're delivering a premium service — hot stones, oils, the works — at a steep discount. We'd like to raise your solo 60-min to $72 and 90-min to $93. No margin changes.
The math for you: About $6 more per solo 60-min voucher and $7 more per solo 90-min. That's roughly $2,100 more per quarter at current volume. Your customers still get a great deal at 28% off."