The expected lifetime value of a custom acquisition is so high for these services that Groupon makes sense even if the conversion rate is < 5%. And, since most salon owners can push the risk downward to their commissioned (paid by the job, really) staff, there's even less disincentive. Only the staffers still trying to build a book of business will accept Groupon customers, and those employees' opportunity losses are low because they end-up sitting around between clients anyway. So, the risk/reward trade-off of using Grupon in these industries is quite good.