Working With Daily Deal Sites Pros and Cons
Most of us are familiar with Groupon, a site that allows you to find deals in your area; 40% off at your favorite restaurant, massage prices cut in half, or maybe a Zoo pass that is two for one. Groupon is a popular example of a daily deal site. These sites are used to help expand a businesses reach, by offering sales that are too good to pass up.
The question is, is this helping your business or destroying it?? We will focus on the advantages and disadvantages of using these sites to grow your business and/or audience reach.
To help you identify which sites are considered daily deal sites, here is a list of some of the most popular services people use.
Now to the good stuff! What you‘ve been waiting for. Lets discuss the advantages to using these sites.
1. Extended Reach
These sites give you the potential to reach new, larger audiences. This is especially important to new business that don‘t have a customer base built up yet. The most recent report conducted by Groupon, showed the site had 48.2 million customers and last year, over 190 million people downloaded the Groupon mobile app.
It gives you a whole different market place for your company to reach and by posting a sale for a small period, you are getting people who’ve never heard about you to try your services or attend an event; now it’s up to you to impress them so they come back.
2. No Upfront Costs
Most services are free to sign up and post your discounts. However, make sure to read the fine print before choosing your service.
For example, if you were to go with Groupon, they get 50% of your sales. So if your product or service is originally $100 and you give them a 50% on the site, you will only make $50 in the end. BUT Groupon gets their share, so really you only get $25 on something that was originally $100. So make sure you know all the costs before moving forward.
3. Helps get people into the venue
If you are planning an event that has vendors inside (food, drink, merchandise etc.), by getting bodies inside the event your vendor sales should increase as well. The loss of ticket revenue may be offset by the increase of revenue from having additional bodies at the event purchasing items.
Disadvantages (based on experience)
Being on the other end, ticketing for different events that have used these services, we have seen it all. Here is an example of what I’m talking about.
A recent event we ticketed for used the service we mentioned above, Groupon. Our event promoters chose to work with Groupon to bring in new sales and take advantage of their large email database to drive up traffic.
However, Groupon purchased paid ads on Google to promote the event, so when someone searched for that event, the first thing they would see is the paid ad offering the discount (see left).
This ad would appear directly above the event's actual website where they were selling normal priced tickets.
Unfortunately the event didn‘t realize this was taking place until weeks before the event, meaning Groupon basically stole their customers and they had a huge decrease in revenue during their prime selling hours.
1. Slower Time Entering The Event
The day of your event, because customers purchased some tickets on a daily deal service and some on the actual website, you will be left with two different types of barcoded tickets. Meaning, your staff will have to manually checkin your guests, slowing down the entrance and requiring more onsite help as well.
2. Bad Overall Customer Experience
Where most ticketing includes instructions or follow up emails with instructions on what to do next, locations, parking etc. these daily sites aren‘t as detailed. Leaving your guests calling last minute wondering where you are located, more about their appointment or the event which makes you look unorganized.
3. Is The Return Worth It?
You have to calculate how much ticket revenue you are giving up and if the return is worth it which can sometimes be questionable.
4. People Get Use To The Discount
New customers aren't going to be used to your original prices, they will get use to paying that discounted price. They are getting use to paying 50% off and once they buy at 50% off, they will always look to get tickets through these services and not your site in the future. So even if you continue using these services year after year, you will sell a lot of tickets, but not because they are driving your sales up, but because people are used to purchasing from these sites and not your own.
5. The Sites Aren't Doing Any Of The Work
With the amount of technology we have, people are getting more and more tech savvy. That means they are getting use to over looking your original prices and finding discounts, coupon codes through someone else. Most customers automatically search for discounted prices before committing to a service or purchasing tickets. That means these discount sites are getting a profit for doing nothing, but hosting your products. That’s it!!
Hopefully, this article gave you a better idea of how the daily deal world works. After years of experience, we’ve seen everything among our event promoters; successful profit increases or stolen revenue. The message to take away is to really think about what you want out of these sites before using one and always consider the pros and cons.